Aoxing Pharmaceuticals Q2 Revenue Up 27%; Net Income $2.1 Million, Up 265%
Direct-To-Customer Sales Program Helps Raise Gross Margins To 79%
FOSTER CITY, Calif., Feb. 8, 2016 /PRNewswire/ -- Aoxing Pharmaceutical Company, Inc. (NYSE MKT: AXN) today announced that for the second quarter of fiscal year 2016, ended December 31, 2015, the Company achieved revenue of $8,195,839, a 27% improvement on revenue of $6,430,701 recorded in the same quarter in fiscal 2015.
The Company's net income in Q2 of fiscal year 2016 was $2,068,635, or $.03 per share, up 265% from the net income of $567,169, or $.01 per share, in the Q2 of fiscal year 2015. Gross margin for the three months ended December 31, 2015 was 79% compared to gross margin of 75% in the like year-ago quarter.
Aoxing's cash balance as of December 31, 2015 was $6,435,362, compared to $5,371,545 as of June 30, 2015, the end of its last fiscal year.
The Company's increase in second quarter revenue was primarily attributable to an increase in the number of customers for its lead pain management product, Zhongtong'an. Aoxing's 265% increase in net income was primarily the result of the Company's increased revenue, improved gross profit, and a 40% decrease in net interest expense due to a reduction in loan balances. Such earnings growth was realized despite higher R&D expenses during the recent quarter, which was mainly due to a large payment for a key raw material used in our R&D program.
Mr. Zhenjiang Yue, Chairman and CEO of Aoxing Pharma, said, "We are pleased by the continued growth of our Company, as our revenue for the first half of fiscal year 2016 increased by 54% to $16,940,661. Our Zhongtong'an product, which was recently included in the government essential drug procurement lists in four new provinces, has continued to accelerate our sales growth. We believe the growing market for Zhongtong'an, coupled with the introduction to market of our Tilidine HCL pain fighting tablets and capsules during the current quarter, should help our Company achieve its revenue target of $45 million in fiscal year 2016, along with continued earnings growth in fiscal year 2016 and beyond."
About the Company
Aoxing Pharmaceutical Company, Inc. is a U.S. incorporated pharmaceutical company with its operations in China, specializing in research, development, manufacturing and distribution of a variety of narcotics and pain-management products. Headquartered in Shijiazhuang City, outside Beijing, Aoxing Pharma has the largest and most advanced manufacturing facility in China for highly regulated narcotic medicines. Its facility is one of the few GMP facilities licensed for the manufacture of narcotic medicines by the China Food and Drug Administration ("CFDA"). For more information, please visit: www.aoxingpharma.com.
Safe Harbor Statement. This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and so these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume any duty to update these forward-looking statements.
| AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES |
|||||||
| CONSOLIDATED BALANCE SHEETS |
|||||||
| December 31, |
June 30, |
||||||
| 2015 |
2015 |
||||||
| ASSETS |
(Unaudited) |
||||||
| CURRENT ASSETS: |
|||||||
| Cash and cash equivalents |
$ |
6,435,362 |
$ |
5,371,545 |
|||
| Accounts receivable, net |
6,578,492 |
5,764,738 |
|||||
| Notes receivable, net |
23,103 |
89,317 |
|||||
| Inventories, net |
3,900,849 |
3,240,026 |
|||||
| Prepaid expenses and other current assets |
8,193,479 |
6,630,407 |
|||||
| TOTAL CURRENT ASSETS |
25,131,285 |
21,096,033 |
|||||
| LONG-TERM ASSETS: |
|||||||
| Property and equipment, net of accumulated depreciation |
26,647,887 |
28,651,717 |
|||||
| Deferred income tax |
1,319,524 |
2,711,610 |
|||||
| Other intangible assets, net |
427,554 |
484,857 |
|||||
| Investment in joint venture |
53,210 |
96,475 |
|||||
| TOTAL LONG-TERM ASSETS |
28,448,175 |
31,944,659 |
|||||
| TOTAL ASSETS |
$ |
53,579,460 |
$ |
53,040,692 |
|||
| LIABILITIES AND SHAREHOLDERS' EQUITY |
|||||||
| CURRENT LIABILITIES: |
|||||||
| Short-term borrowings |
$ |
11,038,551 |
$ |
12,484,356 |
|||
| Accounts payable |
2,348,225 |
3,625,139 |
|||||
| Notes payable |
- |
1,631,641 |
|||||
| Loan payable – bank |
14,939,856 |
16,316,408 |
|||||
| Current portion of loan payable - related parties |
13,494 |
5,793 |
|||||
| Current portion of loan payable – others |
15,402 |
- |
|||||
| Accrued expenses and other current liabilities |
7,154,105 |
7,176,325 |
|||||
| TOTAL CURRENT LIABILITIES |
35,509,633 |
41,239,662 |
|||||
| LONG-TERM LIABILITIES: |
|||||||
| Loan payable - related parties |
- |
8,158 |
|||||
| Loan payable – others |
- |
1,361,199 |
|||||
| Deferred income |
348,083 |
368,751 |
|||||
| TOTAL LONG-TERM LIABILITIES |
348,083 |
1,738,108 |
|||||
| Common stock, par value $0.001, 100,000,000 shares authorized, 72,252,200 and 69,839,259 shares issued and outstanding on September 30, 2015 and June 30, 2015 |
74,299 |
69,839 |
|||||
| Additional paid in capital |
71,998,484 |
66,457,250 |
|||||
| Accumulated deficit |
(55,018,398) |
(58,354,968) |
|||||
| Accumulated other comprehensive income |
1,713,633 |
3,066,026 |
|||||
| TOTAL SHAREHOLDERS' EQUITY OF THE COMPANY |
18,768,018 |
11,238,147 |
|||||
| NONCONTROLLING INTEREST IN SUBSIDIARIES |
(1,046,274) |
(1,175,225) |
|||||
| TOTAL EQUITY |
17,721,744 |
10,062,922 |
|||||
| TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY |
$ |
53,579,460 |
$ |
53,040,692 |
|||
See accompanying notes to the consolidated financial statements
| AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES |
||||||||||||||||||
| CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS) |
||||||||||||||||||
| (Unaudited) |
||||||||||||||||||
| For the three months ended |
For the six months ended |
|||||||||||||||||
| December 31, |
December 31, |
|||||||||||||||||
| 2015 |
2014 |
2015 |
2014 |
|||||||||||||||
| SALES |
$ |
8,195,839 |
$ |
6,430,701 |
$ |
16,940,661 |
$ |
10,955,783 |
||||||||||
| COST OF SALES |
1,726,592 |
1,624,853 |
3,484,671 |
3,012,386 |
||||||||||||||
| GROSS PROFIT |
6,469,246 |
4,805,849 |
13,455,990 |
7,983,397 |
||||||||||||||
| OPERATING EXPENSES: |
||||||||||||||||||
| Research and development expense |
830,105 |
95,597 |
1,207,411 |
203,147 |
||||||||||||||
| General and administrative expenses |
511,127 |
821,008 |
1,455,485 |
1,332,495 |
||||||||||||||
| Selling expenses |
1,589,866 |
1,775,924 |
3,984,212 |
2,978,433 |
||||||||||||||
| Depreciation and amortization |
128,126 |
140,801 |
259,656 |
280,076 |
||||||||||||||
| TOTAL OPERATING EXPENSES |
3,059,224 |
2,833,331 |
6,906,764 |
4,794,151 |
||||||||||||||
| INCOME FROM OPERATIONS |
3,410,023 |
1,972,518 |
6,549,225 |
3,189,246 |
||||||||||||||
| OTHER INCOME (EXPENSE): |
||||||||||||||||||
| Interest expense, net of interest income |
(979,906) |
(1,628,120) |
(1,908,936) |
(2,821,280) |
||||||||||||||
| Gain on foreign currency transactions |
24,753 |
0 |
83,345 |
|||||||||||||||
| Equity in loss of joint venture, net |
(14,474) |
(22,018) |
(38,765) |
(47,989) |
||||||||||||||
| Subsidy income |
157,266 |
279,573 |
205,027 |
279,573 |
||||||||||||||
| TOTAL OTHER EXPENSE |
(812,362) |
(1,370,565) |
(1,659,329) |
(2,589,696) |
||||||||||||||
| INCOME BEFORE INCOME TAXES |
2,597,661 |
601,952 |
4,889,897 |
599,550 |
||||||||||||||
| Income tax expense |
409,393 |
- |
1,353,196 |
- |
||||||||||||||
| NET INCOME |
2,188,268 |
601,952 |
3,536,700 |
599,550 |
||||||||||||||
| Net income attributed to non-controlling interest in subsidiaries |
119,633 |
34,784 |
200,129 |
40,251 |
||||||||||||||
| INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY |
2,068,635 |
567,169 |
3,336,571 |
559,299 |
||||||||||||||
| OTHER COMPREHENSIVE INCOME (LOSS): |
||||||||||||||||||
| Foreign currency translation adjustment |
(753,581) |
7,900 |
(1,423,572) |
21,708 |
||||||||||||||
| COMPREHENSIVE PROFIT |
1,315,054 |
575,068 |
1,912,999 |
581,007 |
||||||||||||||
| Other comprehensive income (loss) attributable to non-controlling interest |
(37,679) |
395 |
(71,179) |
1,085 |
||||||||||||||
| COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY |
$ |
1,352,733 |
$ |
574,673 |
$ |
1,984,178 |
$ |
579,922 |
||||||||||
| EARNINGS PER SHARE |
||||||||||||||||||
| Basic |
$ |
0.03 |
$ |
0.01 |
$ |
0.05 |
$ |
0.01 |
||||||||||
| Diluted |
$ |
0.03 |
$ |
0.01 |
$ |
0.05 |
$ |
0.01 |
||||||||||
| WEIGHTED AVERAGE SHARES OUTSTANDING |
||||||||||||||||||
| Basic |
73,097,698 |
57,614,546 |
71,475,000 |
57,614,546 |
||||||||||||||
| Diluted |
73,177,698 |
57,674,546 |
71,555,000 |
57,674,546 |
||||||||||||||
| See accompanying notes to the consolidated financial statements
|
||||||||||||||||||
SOURCE Aoxing Pharmaceutical Company, Inc.
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