-- Q1 2010 Revenue Increased 40.2% to $13.4 Million, Net Income
Increased 22.3% to $2.2 Million with EPS of $0.08 vs. $0.07 -- Cash
and Equivalents of $14.4 Million on September 30, 2009 -- First
Quarter 2010 Cash Flow from Operations Increased 345.5% to $2.2
million -- Formed Joint Venture with Sichuan Mingxin Pharmaceutical
Co. to Pursue Macrolide Antibiotics Growth Initiative CHENGDU,
China, Nov. 13 /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 first
quarter ended September 30, 2009. Revenue for the first quarter of
fiscal 2010 was approximately $13.4 million, an increase of 40.2%
compared to $9.6 million for the first quarter of fiscal 2009. The
increase resulted from higher sales volume of portfolio products,
increased market penetration through the Company's broad
distribution channels, which was supported by additional production
capacity from the new facility. Revenues from the top three selling
products, Ginkgo Mihuan Oral Liquid, Arpu Shuangxin Oral Liquid,
and Azithromycin Dispersible Tablets, were collectively $7.1
million and represented approximately 53.1% of total revenues for
the quarter. During the fourth quarter of fiscal 2009 sales of the
top three selling products were approximately $7.8 million, or
58.6% of total revenues. Cost of goods sold for the three months
ended September 30, 2009 was approximately $6.3 million or 47.4% of
revenue as compared to $4.7 million or 49.0% of revenue for the
three months ended September 30, 2008, yielding a gross profit of
$7.1 million and gross margins of 52.6%, compared to $4.9 million
in gross profit and gross margins of 51.0% during the first quarter
of fiscal 2009. Gross margins improved as a result of the product
mix, in addition to enhanced cost controls and manufacturing
efficiencies implemented during the production process. Operating
expenses for the three months ended September 30, 2009 were
approximately $4.3 million, up 58.7% compared to the same period in
2008. Selling, general and administration expenses for the period
increased to approximately $4.1 million from $2.6 million in the
first quarter of fiscal 2009 as a result of the implementation of
Tianyin's sales and marketing strategy, including increased sales
payrolls and direct marketing expenses, in addition to a consulting
expense amounted to $0.5 million paid to external service
providers. Research and development expenses for the three months
ended September 30, 2009 increased 134.1% to $0.2 million from the
first quarter of fiscal 2009. Operating income for the first
quarter of fiscal 2010 totaled approximately $2.7 million, a 26.9%
increase from the $2.2 million reported for the first quarter of
fiscal 2009. Operating margins were 20.5% and 22.6% for the first
quarter of fiscal 2010 and fiscal 2009, respectively as the Company
continued to spend aggressively on sales and marketing initiatives
to generate incremental product sales. Net income was approximately
$2.2 million in the first quarter of fiscal 2010, a 22.3% increase,
compared to $1.8 million for the first quarter of fiscal 2009. The
company had an effective tax rate of 18.9% and 16.7%, for the first
quarter of fiscal 2010 and 2009, respectively. Diluted earnings per
share were $0.08 compared to $0.07 for the first quarter of fiscal
2010 and fiscal 2009 respectively, based upon 27.5 million and 24.6
million shares. The divergence in the share account relates to
accounting for the company's preferred shares which are convertible
into common, in addition to warrants which were exercised. "We are
pleased to report another quarter of strong revenue growth and
improved profitability. The results of our marketing strategies to
support a high quality product portfolio are driving measured
improvements in our revenue base. Additionally, increased
production capacity is enabling us to accommodate higher volumes of
several leading drugs, including Gingko Mihuan, through our
distribution channels," stated Dr. Guoqing Jiang, Tianyin's Chief
Executive Officer." Balance Sheet and Cash Flow Cash and cash
equivalents and restricted cash totaled $14.4 million on September
30, 2009 compared to $12.4 million on June 30, 2009. The Company
had a current ratio of 5.8 to 1 and total stockholders' equity of
46.2 million, which includes noncontrolling interest of $0.4
million, with total assets of $50.8 million versus total
liabilities of $4.6 million on September 30, 2009. For the first
three months of fiscal 2010, the Company generated $2.2 million in
cash from operations versus $0.5 million for the same period in
fiscal 2009. Business Development & Outlook On September 28,
2009, Tianyin appointed Mr. Tao Yang to the position of Chief
Operating Officer. Mr. Yang has more than 18 years experience in
the sales and marketing industry. He was appointed in November 2008
as Chief Advisor for Sales and Marketing and Special Advisor to Dr.
Jiang, the CEO of the Company. Since then, Mr. Yang has helped
implement a strategy to boost sales of leading products and further
improve the efficiency of Tianyin's sales and marketing team. On
October 29, 2009, Tianyin announced it has formed a joint venture
with Sichuan Mingxin Pharmaceutical Co., Ltd ("Mingxin") named
Sichuan Jiangchuan Pharmaceutical Co., Ltd. ("Jiangchuan"). Tianyin
owns 77% of Jiangchuan and will utilize this as the foundation for
a broader, longer-term strategy to build a significant presence in
the rapidly growing Chinese macrolide antibiotics market, while
diversifying its revenue base of western pharmaceuticals. On
October 29, 2009 management increased fiscal 2010 guidance for the
year which ends June 30, 2010 and expects to report revenues of
more than $63.6 million and net income of at least $11.3 million,
representing 48.3% and 43.0% year-over-year growth respectively.
"The Chinese stimulus plan and favorable policies for the health
care industry are now starting to manifest themselves throughout
the pharmaceutical industry by driving sales of many popular
pharmaceutical products and creating the catalyst for long-term
secular growth. We are extremely excited about our recently
announced Joint Venture, which is named Sichuan Jiangchuan
Pharmaceutical Co. Ltd. This will enable us to capitalize on the
large and rapidly growing macrolide antibiotics market. Supported
by our existing marketing expertise and extensive distribution
channels, we are confident that this new initiative will create a
meaningful growth driver in fiscal 2011 and beyond, while
complementing the organic growth of our current product portfolio
with widely used western style medications. With a solid business
foundation and favorable policies from the Chinese government, we
will continue to execute on our long-term growth plan while
creating both near and long-term value for our shareholders,"
concluded Dr. Jiang. Conference Call The Company will host a
conference call to discuss the 2010 first quarter financial results
on Friday, November 13, 2009 at 10:30 a.m. ET. Interested
participants should call +1-877-941-2321 within the United States,
or US +1-480-629-9714 if calling internationally. The conference ID
is 4182573. It is advisable to dial in approximately 5-10 minutes
prior to 10:30 a.m. ET. If you are unable to participate in the
call at the scheduled time, a playback will be available through
November 21, 2009. To listen to the playback, please call
+1-800-406-7325 from within the United States, or US
+1-303-590-3030 internationally. Please use passcode 4182573 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 39 products, 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 17
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. 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: For
the Company: Allen Tang, Ph.D., MBA, Assistant to the CEO Tel:
+86-158-2122-5642 Email: Investors: Mr. Matthew Hayden, HC
International Tel: +1-561-245-5155 Email: Web:
http://www.hcinternational.net/ Consolidated Balance Sheets
(Unaudited) September 30, June 30, 2009 2009 (Unaudited) Assets
Current assets: Cash and cash equivalents $14,352,876 $12,352,223
Accounts receivable, net of allowance for doubtful accounts of
$172,182 and $171,947 at September 30, 2009 and June 30, 2009,
respectively 7,121,470 5,620,519 Inventory 3,686,431 3,808,289
Advance payments 764,307 1,188,115 Loan receivable 293,400 -- Other
receivables 201,321 601,912 Other current assets 62,560 81,277
Total current assets 26,482,365 23,652,335 Property and equipment,
net 10,014,096 9,642,526 Intangibles, net 14,302,974 12,037,483
Total assets $50,799,435 $45,332,344 Liabilities Current
liabilities: Accounts payable and accrued expenses $1,577,677
$1,392,639 Short-term bank loans 1,400,985 1,399,075 VAT taxes
payable 475,592 458,930 Income taxes payable 510,250 490,514 Other
taxes payable 11,473 11,890 Dividends payable 233,683 325,417 Other
current liabilities 341,957 307,934 Total current liabilities
4,551,617 4,386,399 Total liabilities 4,551,617 4,386,399 Equity
Stockholders' equity: Common stock, $0.001 par value, 50,000,000
shares authorized, 23,520,057 and 17,908,912 shares issued and
outstanding at September 30, 2009 and June 30, 2009, respectively
23,520 17,909 Series A convertible preferred stock, $0.001 par
value, 2,655,250 and 7,146,500 shares issued and outstanding at
September 30, 2009 and June 30, 2009, respectively 2,655 7,147
Additional paid-in capital 22,740,187 19,694,514 Statutory reserve
2,299,807 2,299,807 Treasury stock (111,587) (111,587) Retained
earnings 18,268,426 16,486,775 Accumulated other comprehensive
income 2,587,237 2,551,380 Total stockholders' equity 45,810,245
40,945,945 Noncontrolling interest 437,573 -- Total equity
46,247,818 40,945,945 Total liabilities and equity $50,799,435
$45,332,344 Consolidated Statements of Operations and Comprehensive
Income (Unaudited) For the Three Months Ended September 30, 2009
2008 Sales $13,405,203 $9,561,940 Cost of sales 6,349,227 4,682,624
Gross profit 7,055,976 4,879,316 Operating expenses: Selling,
general and administrative 4,117,766 2,633,361 Research and
development 192,490 82,638 Total operating expenses 4,310,256
2,715,999 Income from operations 2,745,720 2,163,317 Other income
(expenses): Interest income 10,415 -- Interest expense (19,975)
(27,720) Other income (expenses) 39,502) 4,245 Total other expenses
(49,062) (13,475) Income before provision for income tax 2,696,658
2,149,842 Provision for income tax 509,936 358,849 Net income
before noncontrolling interest 2,186,722 1,790,993 Noncontrolling
interest (2,526) -- Net income 2,189,248 1,790,993 Other
comprehensive income Foreign currency translation adjustment 35,857
89,434 Comprehensive income $2,225,105 $1,880,427 Basic earnings
per share $0.10 $0.09 Diluted earnings per share $0.08 $0.07
Weighted average number of common shares outstanding Basic
19,735,790 15,357,818 Diluted 27,516,458 24,558,625 Consolidated
Statements of Cash Flows (Unaudited) For the Three Months Ended
September 30, 2009 2008 Cash flows from operating activities: Net
Income $2,189,248 $1,790,993 Adjustments to reconcile net income to
net cash provided by (used in) operating activities: Depreciation
and amortization 197,037 119,399 Noncontrolling interest (2,526) --
Share-based payments 512,209 -- Loss on disposal of fixed assets
39,502 -- Changes in current assets and current liabilities:
Accounts receivable (1,492,362) (88,138) Inventory 126,979
(1,019,969) Other receivables 401,155 (339,566) Other current
assets 18,750 152,822 Accounts payable and accrued expenses 183,242
(60,470) VAT taxes payable 16,025 (15,780) Income tax payable
19,054 16,489 Other taxes payable (433) (22,708) Other current
liabilities 33,582 (29,277) Total adjustments 52,214 (1,287,198)
Net cash provided by operating activities 2,241,462 503,795 Cash
flows from investing activities: Additions to property and
equipment (525,965) -- Additions to intangible assets - drug
(1,891,269) (175,668) Loan receivable (293,220) -- Net cash used in
investing activities (2,710,454) (175,668) Cash flows from
financing activities: Additional paid-in capital 2,534,581 --
Noncontrolling interest 439,830 -- Payment of dividends (499,331)
-- Net cash provided by financing activities 2,475,080 -- Effect of
foreign currency translation on cash (5,435) 32,648 Net increase in
cash and cash equivalents 2,000,653 360,775 Cash and cash
equivalents - beginning 12,352,223 12,057,150 Cash and cash
equivalents - ending $14,352,876 $12,417,925 Supplemental schedule
of non cash activities Advance payments exchanged for intangible
assets - drug $425,169 $-- DATASOURCE: Tianyin Pharmaceutical Co.,
Inc. CONTACT: Allen Tang, Ph.D., MBA, Assistant to the CEO of the
Company, +86-158-2122-5642, ; Investors, Matthew Hayden of HC
International, +1-561-245-5155, Web site:
http://www.tianyinpharma.com/ http://www.hcinternational.net/
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