Attached files
| file | filename |
|---|---|
| EX-99.1 - TRANSCRIPT - TIANYIN PHARMACEUTICAL CO., INC. | ex99one.htm |
| 8-K - TIANYIN PHARMACEUTICAL CO., INC. - TIANYIN PHARMACEUTICAL CO., INC. | tpi8k51810.htm |
Exhibit 99.2
Tianyin Reports Record Third Quarter 2010 Financial Results
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 | ||||
| Q3 FY2010 | Q3 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% vs. $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.
2
Revenues from the our top selling products, Ginkgo Mihuan Oral Liquid (GMOL), Arpu 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."
3
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 Jianchuan 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.
4
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: Dr.Tong@tianyinpharma.com
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
5
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 | ||||
6
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 | ||||||||||||
7
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 | $ | - | ||||
8