Attached files
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| EX-99.2 - SCRIPT OF CONFERENCE CALL ON NOVEMBER 11, 2010 - TIANYIN PHARMACEUTICAL CO., INC. | ex99two.htm |
| 8-K - TIANYIN PHARMACEUTICAL CO., INC. - TIANYIN PHARMACEUTICAL CO., INC. | tpi8k111610.htm |
Exhibit 99.1
Tianyin Reports Record First Quarter Fiscal Year 2011 Financial Results
Press Release Source: Tianyin Pharmaceutical Co., Inc. On Wednesday November 10, 2010, 14:42:52 GMT
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’s (“Jiangchuan”) macrolide facility construction progress was on schedule, reaffirmed completion by yearend 2010
1Q FY2011 Results
| 1QFY2010 | 1QFY2009 | 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)
|
$0.12
|
$0.08
|
+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:
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 million
Qingrejiedu 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 Tianyin’s management and employees, 56 in total individuals for their efforts in delivering significant growth of 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 1QFY2011 improved to 16.7% up from 16.3% for 1QFY2010 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 1QFY2011 and 1QFY2009, respectively.
Balance Sheet and Cash Flow
As 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 income growth of $3.7 million. We believe that Tianyin is adequately funded to meet all of the working capital and capital expenditure needs for FY2011.
Business Development & Outlook
Progress update on Sichuan Jiangchuan Pharmaceutical Co., Ltd (“Jiangchuan”):
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 the 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 (240 ton capacity) expected to be operational the 2nd half of FY 2011, followed by Phase II (total of 480 ton capacity including phase I) with an total anticipated capital expenditures of $20 million. Tianyin anticipates the revenue contribution from the macrolide initiate to begin in the 2nd half of fiscal year 2011.
Conference Call
Senior 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: http://viavid.net/dce.aspx?sid=00007DBB
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 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:
| Investors 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 |
Consolidated Balance Sheets
|
September 30,
|
June 30,
|
|||||||
|
2010
|
2010
|
|||||||
|
Assets
|
(Unaudited)
|
|||||||
|
Current assets:
|
||||||||
|
Cash and cash equivalents
|
$ | 26,889,203 | $ | 27,009,066 | ||||
|
Accounts receivable, net of allowance for doubtful accounts of $427,939
|
9,171,877 | 8,185,240 | ||||||
|
and $421,079 at September 30, 2010 and June 30, 2010, respectively
|
||||||||
|
Inventory
|
5,218,254 | 3,588,824 | ||||||
|
Advance payments
|
389,220 | 382,980 | ||||||
|
Loans receivable
|
299,400 | 294,600 | ||||||
|
Other current assets
|
172,189 | 77,283 | ||||||
|
Total current assets
|
42,140,143 | 39,537,993 | ||||||
|
Property and equipment, net
|
17,023,433 | 14,968,822 | ||||||
|
Intangibles, net
|
15,297,911 | 15,232,286 | ||||||
|
Total assets
|
$ | 74,461,487 | $ | 69,739,101 | ||||
|
Liabilities
|
||||||||
|
Current liabilities:
|
||||||||
|
Accounts payable and accrued expenses
|
$ | 1,523,622 | $ | 1,715,781 | ||||
|
Accounts payable – construction related
|
1,131,717 | 2,248,849 | ||||||
|
Short-term bank loans
|
1,497,000 | 1,473,000 | ||||||
|
VAT taxes payable
|
583,630 | 658,312 | ||||||
|
Income taxes payable
|
916,459 | 861,614 | ||||||
|
Other taxes payable
|
59,801 | 19,564 | ||||||
|
Dividends payable
|
54,857 | 72,995 | ||||||
|
Other current liabilities
|
597,665 | 429,135 | ||||||
|
Total current liabilities
|
6,364,751 | 7,479,250 | ||||||
|
Total liabilities
|
6,364,751 | 7,479,250 | ||||||
|
Equity
|
||||||||
|
Stockholders’ equity:
|
||||||||
|
Common stock, $0.001 par value, 50,000,000 shares authorized,
|
27,986 | 27,326 | ||||||
|
27,986,016 and 27,326,527 shares issued and outstanding at
|
||||||||
|
September 30, 2010 and June 30, 2010, respectively
|
||||||||
|
Series A convertible preferred stock, $0.001 par value 1,360,250 shares
|
1,360 | 1,360 | ||||||
|
issued and outstanding at September 30, 2010 and June 30, 2010,
|
||||||||
|
Respectively
|
||||||||
|
Additional paid-in capital
|
30,891,906 | 29,623,396 | ||||||
|
Statutory reserve
|
3,732,883 | 3,732,883 | ||||||
|
Treasury stock
|
(111,587 | ) | (111,587 | ) | ||||
|
Retained earnings
|
29,310,447 | 25,687,770 | ||||||
|
Accumulated other comprehensive income
|
3,797,958 | 2,845,076 | ||||||
|
Total stockholders’ equity
|
67,650,953 | 61,806,224 | ||||||
|
Noncontrolling interest
|
445,783 | 453,627 | ||||||
|
Total equity
|
68,096,736 | 62,259,851 | ||||||
|
Total liabilities and equity
|
$ | 74,461,487 | $ | 69,739,101 | ||||
Consolidated Statements of Operations and Comprehensive Income
(Unaudited)
|
For the Three Months Ended
|
||||||||
|
September 30,
|
||||||||
|
2010
|
2009
|
|||||||
|
Sales
|
$ | 21,950,814 | $ | 13,405,203 | ||||
|
Cost of sales
|
11,139,689 | 6,349,227 | ||||||
|
Gross profit
|
10,811,125 | 7,055,976 | ||||||
|
Operating expenses:
|
||||||||
|
Selling, general and administrative
|
5,987,226 | 4,117,766 | ||||||
|
Research and development
|
257,975 | 192,490 | ||||||
|
Total operating expenses
|
6,245,201 | 4,310,256 | ||||||
|
Income from operations
|
4,565,924 | 2,745,720 | ||||||
|
Other income (expenses):
|
||||||||
|
Interest income (expense)
|
9,206 | (9,560 | ) | |||||
|
Other expenses
|
- | (39,502 | ) | |||||
|
Total other income (expenses)
|
9,206 | (49,062 | ) | |||||
|
Income before provision for income taxes
|
4,575,130 | 2,696,658 | ||||||
|
Provision for income taxes
|
905,439 | 509,936 | ||||||
|
Net income
|
3,669,691 | 2,186,722 | ||||||
|
Less: Net loss attributable to noncontrolling interest
|
(7,844 | ) | (2,526 | ) | ||||
|
Net income attributable to Tianyin Pharmaceutical Co., Inc.
|
3,677,535 | 2,189,248 | ||||||
|
Other comprehensive income
|
||||||||
|
Foreign currency translation adjustment
|
952,882 | 35,857 | ||||||
|
Comprehensive income
|
$ | 4,630,417 | $ | 2,225,105 | ||||
|
Basic earnings per share
|
$ | 0.13 | $ | 0.10 | ||||
|
Diluted earnings per share
|
$ | 0.12 | $ | 0.08 | ||||
|
Weighted average number of common shares outstanding
|
||||||||
|
Basic
|
27,891,488 | 19,735,790 | ||||||
|
Diluted
|
29,945,191 | 27,516,458 | ||||||
Consolidated Statements of Cash Flows
(Unaudited)
|
For the Three Months Ended
|
||||||||
|
September 30,
|
||||||||
|
2010
|
2009
|
|||||||
|
Cash flows from operating activities:
|
||||||||
|
Net Income
|
$ | 3,669,691 | $ | 2,186,722 | ||||
|
Adjustments to reconcile net income to net cash
|
||||||||
|
provided by (used in) operating activities:
|
||||||||
|
Depreciation and amortization
|
314,116 | 197,037 | ||||||
|
Share-based payments
|
1,269,170 | 512,209 | ||||||
|
Loss on disposal of fixed assets
|
- | 39,502 | ||||||
|
Changes in current assets and current liabilities:
|
||||||||
|
Accounts receivable
|
(843,012 | ) | (1,492,362 | ) | ||||
|
Inventory
|
(1,552,067 | ) | 126,979 | |||||
|
Other current assets
|
(93,032 | ) | 419,905 | |||||
|
Accounts payable and accrued expenses
|
(189,572 | ) | 183,242 | |||||
|
Accounts payable – construction related
|
(1,139,900 | ) | - | |||||
|
VAT taxes payable
|
(111,405 | ) | 16,025 | |||||
|
Income tax payable
|
40,316 | 19,054 | ||||||
|
Other taxes payable
|
66,462 | (433 | ) | |||||
|
Dividends payable
|
(18,138 | ) | - | |||||
|
Other current liabilities
|
133,153 | 33,582 | ||||||
|
Total adjustments
|
(2,123,909 | ) | 54,740 | |||||
|
Net cash provided by operating activities
|
1,545,782 | 2,241,462 | ||||||
|
Cash flows from investing activities:
|
||||||||
|
Additions to property and equipment
|
(1,922,700 | ) | (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
|
- | 2,534,581 | ||||||
|
Contribution from minority shareholders
|
- | 439,830 | ||||||
|
Dividends paid
|
(54,857 | ) | (499,331 | ) | ||||
|
Net cash provided by (used in) financing activities
|
(54,857 | ) | 2,475,080 | |||||
|
Effect of foreign currency translation on cash
|
311,912 | (5,435 | ) | |||||
|
Net increase (decrease) in cash and cash equivalents
|
(119,863 | ) | 2,000,653 | |||||
|
Cash and cash equivalents – beginning
|
27,009,066 | 12,352,223 | ||||||
|
Cash and cash equivalents – ending
|
$ | 26,889,203 | $ | 14,352,876 | ||||
|
Supplemental schedule of non cash activities
|
||||||||
|
Advance payments exchanged for intangible assets – drug
|
$ | - | $ | 425,169 | ||||