Tianyin Reports Record Third Quarter 2010 Financial Results
CHENGDU, China, May 12 /PRNewswire-Asia-FirstCall/ -- Tianyin Pharmaceutical Co., Inc., (NYSE Amex: TPI), a biopharmaceutical company that specializes in the modernized traditional Chinese medicine ("TCM") and branded generics today announced fiscal results for its third quarter ended March 31, 2010.
Third quarter fiscal year 2010 ending March 31, 2010 financial highlights
-- Q3 FY2010 revenue increased 60% year over year to $15.9 million, net
Income Increased 53% to $2.9MM with EPS of $0.11 per share (basic), or
$0.09 per share (diluted)
-- Cash and cash equivalents were $23.3 million on March 31st, 2010
-- Nine month 2010 Cash Flow from Operations Increased 95% year over year
to $8.6 million
-- Sichuan Jiangchuan joint venture progress on schedule
Q3 FY2010 Results
Q3 FY2010 Q3 FY2009 YoY
Sales $15.9 million $10.1 million +60%
Gross Profit $8.4 million $4.9 million +71%
Net Income $2.9 million $1.9 million +53%
EPS (Diluted) $0.09 $0.08 +12%
Diluted Shares 31.6 million 24.8 million +27%
Nine Months FY2010 Results
Nine Months Nine Months YoY
FY2010 FY2009
Sales $44.3 million $29.6 million +50%
Gross Profit $23.2 million $14.9 million +55%
Net Income $7.7 million $5.7 million +35%
EPS (Diluted) $0.26 $0.23 +13%
Diluted shares 29.9 million 24.7 million +21%
Sales for 3Q FY2010 was $15.9 million, up 60.0%, as compared to sales of $9.9 million for 3Q FY2009. Sales for the nine months ended March 31, 2010 were $44.3 million, as compared to total sales of $29.6 million for the nine months ended March 31, 2009, an increase of $14.7 million or 50%. The sales growth was primarily the result of the continuous channel expansion, market penetration and optimized usage of our expanded production facility. We expect greater unit sales as a result of the expansion of both our sales channels and sales force as we continue to implement our sales and marketing strategy.
Revenues from the our top selling products, Ginkgo Mihuan Oral Liquid (GMOL), Apu Shuangxin Oral Liquid (ASOL), Xuelian Chongcao (XLCC) and Azithromycin Dispersible Tablets, were $8.8 million, representing 62.9% of the total quarterly revenue.
Cost of sales for the three months ended March 31, 2010 was $7.5 million or 47% of sales as compared to $5.1 million or 51% of sales for the three months ended March 31, 2009. Cost of sales for the nine months ended March 31, 2010 was $21.0 million or 47.5% of sales as compared to $14.7 million or 50% of sales for the nine months ended March 31, 2009. Our cost of sales consists of the raw material cost, labor, depreciation and amortization of manufacturing equipment and facilities, and other overhead. The improvement of our cost of sales was due to an increase in higher margin products in our sales mix along with enhanced cost control measures that yielded greater efficiencies during the manufacturing process.
Gross margin for the three months ended March 31, 2010 was 53% as compared to 49% for the three months ended March 31, 2009. This was achieved by optimizing portfolio with higher margin products, such as Ginkgo Mihuan Oral Liquid and Apu Shuangxin, while reducing the production of lower margin products, such as Qingrejiedu Oral Liquid and Hugan Tablets.
Operating expenses were $4.8 million for the three months ended March 31, 2010, as compared to $2.6 million for the three months ended March 31, 2009. Operating expenses were $13.7 million for the nine months ended March 31, 2010, as compared to $8.0 million for the nine months ended March 31, 2009, an increase of $5.8 million or 73%. The increase was primarily due to our recent sales and marketing strategy that increased our sales payroll and marketing expenses, along with the increased compensation expenses to external service providers.
Net income was $2.9 million for the three months ended March 31, 2010, as compared to net income of $1.9 million for the three months ended March 31, 2009, an increase of $1.0 million or 53%. Net income was $7.7 million for the nine months ended March 31, 2010, as compared to net income of $5.7 million for the nine months ended March 31, 2009, an increase of $1.9 million or 33%. The net income gain was primarily the result of increase in our revenue along with higher product margins.
Diluted earnings per share for the three months ended March 31, 2010 were $0.09, compared to $0.08 in the same period 2009, based on 31.6 million and 24.8 million shares for 2010 and 2009, respectively.
"Our steadfast efforts in sales expansion, market penetration, new production utilization and portfolio optimization were reflected by another quarter of solid growth in both top and bottom line." stated Dr. Jiang, Guoqing, Tianyin's Chief Executive Officer. "To fuel our future growth, we are continuing the Sichuan Jiangchuan Pharmaceutical Joint Venture (Jiangchuan) to produce macrolide antibiotics, which addresses a large and rapidly growing market in China. Our construction is progressing on schedule and we expect Jiangchuan to contribute to our growth starting fiscal 2011. Our 52 product portfolio featuring patented as well as modernized TCMs and branded generics that target a series of high incidence diseases with addressable billion dollar market. We believe that the favorable health care reform policies, along with growing disposable income, and urbanization of vast agricultural regions remain to be strong growth drivers for China's pharmaceutical market."
Balance Sheet and Cash Flow
As of March 31, 2010, we had cash and cash equivalents of $23.3 million. Net cash generated from operating activities was $8.6 million for the nine months ended March 31, 2010 as compared to $4.4 million for the same period of 2009. The strong cash flow was primarily the result of revenue growth which led to an increased net income. We believe that Tianyin is adequately funded to meet all of our working capital and capital expenditure needs for 2010.
Net cash used in investing activities for the nine months ended March 31, 2010 and 2009 totaled $5.5 million and $5.2 million respectively. The increase was mainly due to our new drugs development and the construction of Jiangchuan production facility.
Business Development & Outlook
Progress update on Sichuan Jiangchuan Pharmaceutical (Jiangchuan):
Since our announcement of the Jiangchuan JV on October 29, 2009 focusing on the production of macrolide antibiotics, such as Azithromycin, one of the world's best-selling antibiotics. 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 the JV and plans to utilize Jiangchuan as the foundation of a broader, longer term strategy to build a significant presence in the rapidly growing macrolide antibiotics market. Construction on a new production facility in Xinjin Industrial Development Area commenced January 8, 2010 with Phase I expected to be operational by August, 2010 and Phase II to be operational by the second half of 2010, with total anticipated capital expenditures of $20 million. Tianyin anticipates the revenue contribution from the initiative starting fiscal 2011.
Fiscal 2010 Guidance
The management reaffirms FY2010 guidance of $63 million and net income of $11 million, representing 48% and 40% year over year growth respectively.
Conference Call
Senior management of Tianyin will host a conference call to discuss its fiscal 2010 third quarter results at 9:00 a.m. ET on Wednesday, May 12, 2010.
Interested parties may access the call by dialing +1-877-941-4776 (U.S.), or +1-480-629-9762 (International). The conference ID is 4297414. It is advisable to dial in approximately 5-10 minutes prior to the start of the call.
A replay will be available through May 26, 2010 and can be accessed by dialing +1-800-406-7325 (U.S.), or +1-303-590-3030 (International), passcode 4297414.
This call is being web cast by ViaVid Broadcasting and can be accessed at ViaVid's website at the following link: http://viavid.net/dce.aspx?sid=00007515
About Tianyin Pharmaceutical
Tianyin Pharmaceutical Co., Inc., headquartered in Chengdu, Sichuan Province of China, is a leading biopharmaceutical company that is engaged in the development, manufacturing, marketing and sale of modernized traditional Chinese medicines and branded generics, equipped with two state-of-the-art manufacturing facilities and an extensive nationwide sales and distribution network throughout China. Tianyin currently manufactures and markets a comprehensive portfolio of 52 products, of which 23 are listed in the highly selective National Medicine Catalog of the National Medical Insurance program, 7 are included in the essential drug list of China. Tianyin achieved 10 new drug approvals at SFDA in 2009 and has a pipeline of 12 products pending regulatory approval that target various indications with considerable market potential. Tianyin has an extensive nationwide distribution network with a sales force of 720 sales representatives out of totaled 1,365 employees. 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.
For more information, please contact:
James Jiayuan Tong M.D. Ph.D.
Chief Financial Officer, Chief Business & Development Officer
Director
Tianyin Pharmaceutical Co., Inc.
Web: http://www.tianyinpharma.com
Email: [email protected]
Tel: +86-28-8551-6696 (Chengdu, China)
+1-949-350-6999 (U.S.)
+86 134 36 550011 (China)
Address: 23rd Floor Unionsun YangKuo Plaza
No 2 Block 3 South Renmin Road
Chengdu, 610041
China
Consolidated Balance Sheets
(Unaudited)
March 31, June 30,
2010 2009
(Unaudited)
Assets
Current assets:
Cash and cash equivalents $23,259,400 $12,352,223
Accounts receivable, net of
allowance for doubtful accounts
of $268,955 and $171,947 at March
31, 2010 and June 30, 2009,
respectively 8,257,642 5,620,519
Inventory 3,622,666 3,808,289
Advance payments 381,420 1,188,115
Loan receivable 293,400 --
Other current assets 226,382 683,189
Total current assets 36,040,910 23,652,335
Property and equipment, net 14,571,130 9,642,526
Intangibles, net 15,312,832 12,037,483
Total assets $65,924,872 $45,332,344
Liabilities
Current liabilities:
Accounts payable and accrued
expenses $1,831,973 $1,392,639
Accounts payable - construction
related 2,888,303 --
Short-term bank loans 1,467,000 1,399,075
VAT taxes payable 546,893 458,930
Income taxes payable 686,441 490,514
Other taxes payable 17,083 11,890
Dividends payable 82,541 325,417
Other current liabilities 504,298 307,934
Total current liabilities 8,024,532 4,386,399
Equity
Stockholders' equity:
Common stock, $0.001 par value,
50,000,000 shares authorized,
26,599,027 and 17,908,912 shares
issued and outstanding at March 31,
2010 and June 30, 2009, respectively 26,599 17,909
Series A convertible preferred
stock, $0.001 par value, 10,000,000
shares authorized, 2,072,750 and
7,146,500 shares issued and
outstanding at March 31, 2010 and
June 30, 2009, respectively 2,073 7,147
Additional paid-in capital 29,830,243 19,694,514
Statutory reserve 2,299,806 2,299,807
Treasury stock (111,587) (111,587)
Retained earnings 22,817,495 16,486,775
Accumulated other comprehensive
income 2,598,009 2,551,380
Total stockholders' equity 57,462,638 40,945,945
Noncontrolling interest 437,702 --
Total equity 57,900,340 40,945,945
Total liabilities and
equity $65,924,872 $45,332,344
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
For the Three Months Ended For the Nine Months Ended
March 31, March 31,
2010 2009 2010 2009
Sales $15,917,771 $9,929,301 $44,259,352 $29,593,109
Cost of sales 7,493,230 5,069,133 21,019,960 14,696,736
Gross profit 8,424,541 4,860,168 23,239,392 14,896,373
Operating expenses:
Selling,
general and
administrative 4,607,897 2,481,188 13,135,398 7,709,861
Research and
development 218,515 86,495 608,385 253,353
Total
operating
expenses 4,826,412 2,567,683 13,743,783 7,963,214
Income from
operations 3,598,129 2,292,485 9,495,609 6,933,159
Other income
(expenses):
Interest income
(expense), net (3,845) 4,874 (23,840) 34,682
Other expenses -- (20,821) (39,510) (75,515)
Total other
expenses (3,845) (15,947) (63,350) (40,833)
Income before
provision for
income tax 3,594,284 2,276,538 9,432,259 6,892,326
Provision for
income tax 686,161 380,521 1,767,852 1,148,197
Net income 2,908,123 1,896,017 7,664,407 5,744,129
Less: Net (loss)
attributable
to noncontrolling
interest (1,357) -- (2,397) --
Net income
attributable to
Tianyin 2,909,480 1,896,017 7,666,804 5,744,129
Other comprehensive
income
Foreign currency
translation
adjustment (155) (50,359) 46,629 296,009
Comprehensive
income $2,909,325 $1,845,658 $7,713,433 $6,040,138
Basic earnings per
share $0.11 $0.10 $0.31 $0.29
Diluted earnings
per share $0.09 $0.10 $0.26 $0.23
Weighted average
number of common
shares
Outstanding
Basic 26,363,749 15,987,334 23,650,332 15,902,618
Diluted 31,631,330 15,987,334 29,931,923 24,980,236
Consolidated Statements of Cash Flows
(Unaudited)
For the Nine Months Ended
March 31,
2010 2009
Cash flows from operating activities:
Net Income $7,666,804 $5,744,129
Adjustments to reconcile net income to
net cash provided by (used in) operating
activities:
Depreciation and amortization 678,372 355,933
Bad debt expense 96,734 --
Noncontrolling interest (2,397) --
Share-based payments 1,274,516 --
Loss on disposal of fixed assets 39,510 --
Changes in current assets and current
liabilities:
Accounts receivable (2,725,110) (512,429)
Inventory 190,744 (1,095,822)
Other current assets 457,487 (312,467)
Accounts payable and accrued
expenses 437,483 (76,119)
VAT taxes payable 87,300 46,066
Income tax payable 195,177 37,915
Other taxes payable 5,175 (31,085)
Other current liabilities 195,931 247,867
Total adjustments 930,922 (1,340,141)
Net cash provided by
operating activities 8,597,726 4,403,988
Cash flows from investing activities:
Additions to property and equipment (59,934) (57,994)
Additions to construction in progress (5,278,806) (2,686,567)
Additions to intangible assets -
approved drugs (2,742,168) (2,416,425)
Loan receivable (293,280) --
Accounts payable - construction
related 2,887,122 --
Net cash used in investing
activities (5,487,066) (5,160,986)
Cash flows from financing activities:
Proceeds from (repayment of) bank
loans 65,988 (512,575)
Additional paid-in capital 8,864,825 --
Repayment of shareholder loans -- (102,737)
Proceeds from minority shareholders 439,920 --
Payment of dividends (1,577,068) --
Net cash provided by (used
in) financing activities 7,793,665 (615,312)
Effect of foreign currency translation on
cash 2,852 48,831
Net increase (decrease) in cash and cash
equivalents 10,907,177 (1,323,479)
Cash and cash equivalents - beginning 12,352,223 12,057,150
Cash and cash equivalents - ending $23,259,400 $10,733,671
Supplemental schedule of non cash
activities
Advance payments exchanged for
intangible assets - drug $807,986 $--
SOURCE Tianyin Pharmaceutical Co., Inc.
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