TIANYIN PHARMACEUTICAL INC CO CHENGDU, China, Dec. 24, 2014 /PRNewswire/ -- Tianyin Pharmaceutical Inc. (NYSE Amex: TPI), a pharmaceutical company that specializes in the patented biopharmaceutical, modernized traditional Chinese medicine (mTCM), branded generics and active pharmaceutical ingredients (API) released unaudited preliminary financial results for the first quarter of fiscal year 2015.
Fiscal Year 2015 Ended September 30, 2014 Financial Highlights:
-- Revenue was $9.7 million compared with $14.7 million in 1Q14 with gross
margins improved to 52% compared with 40% in 1Q14;
-- Operating income was $1.4 million, compared with $2.2 million in 1Q14 as
a result of increased R&D spending on Gingko Mihuan Oral Liquid (GMOL)
cardiovascular franchise;
-- Net Income was $1.0 million (10% net margin) compared with $1.5 million
(10% gross margin) in 1Q14;
-- Earnings per diluted share were $0.03 per share compared with $0.05 per
share in 1Q14;
-- Cash and cash equivalents totaled $15.6 million on September 30, 2014.
Comparison of results for the three months ended September 30, 2014 and 2013:
(In $ millions) Three Months Ended
September 30,
-------------
2014 2013
---- ----
Sales 9.7 14.7
Cost of sales 4.7 8.8
Gross profit 5.1 6.0
Income from Operation 1.4 2.2
Provision for income taxes 0.4 0.6
Net income 1.0 1.5
Sales for the quarter ended September 30, 2014 was $9.7 million as compared to $14.7 million for the quarter ended September 30, 2013. The sales decrease was a result of continuous pricing pressure and restrictive sales policies on generic products compared with the same period last year.
Gross Margin for the quarter ended September 30, 2014 was 52% as compared to 40% for the quarter ended September 30, 2013. As discussed above, our gross margin improved, predominately as a result of an increased higher margin products being sold during the period. We see the trend to continue for the rest of fiscal 2015.
Income from Operations was $1.4 million for the quarter ended September 30, 2014, as compared to $2.2 million for the quarter ended September 30, 2013. The decrease of income from operations was mainly due to the amount of research & development costs towards cardiovascular portfolio centered on GMOL.
Net Income was $1.0 million with net margin of 10% for the quarter ended September 30, 2014, as compared to net income of $1.5 million with net margin of 10% for the quarter ended September 30, 2013.
Diluted earnings per share was $0.03 per share based on 29.4 million shares for 1Q15 compared with the earnings of $0.05 per share for 1Q14, based on 29.4 million shares.
Balance Sheet and Cash Flow
As of September 30, 2014, the Company had working capital totaling $22.3 million, including cash and cash equivalents of $15.6 million. Net cash provided by operating activities was $(1.1) million for the three months ended September 30, 2014 as compared with net cash provided from operating activities as $0.2 million for the three months ended September 30, 2013. We believe that TPI is adequately funded to meet all of our working capital and capital expenditure needs for fiscal year 2015.
Business Development & Outlook
Research and Development (R&D)
We focused on innovative products as well as modifications and improvements of existing marketed products with substantial market potential. Our R&D partners include a number of most prestigious academic institutions in China. The partnership-based R&D strategy supports TPI to commercialize, produce, and broaden our product pipeline and to market those products through our sales and marketing infrastructure. In July 2014, the TPI's subsidiary, Chengdu Tianyin, entered into a research and development agreement with a pharmaceutical research company to expand formulation varieties from Gingko Mihuan Oral Liquid (GMOL) to Capsule formulation. The project is expected to be completed before August 2017. TPI has also been in discussion with industrial leading enterprises in integrating sales network resources to boost the revenue of GMOL cardiovascular franchise for the coming year.
Jiangchuan Macrolide Facility (JCM)
In April 2014, JCM has developed a new line of Azithromycin API products that support steady monthly export orders to South Asia. Following a series of tests on quality, purity, intermediates contents, stereochemistry, stability in comparison with the international standards of Azithromycin API, JCM has received monthly orders for manufacturing one of the major intermediates of Azithromycin, Azithromycin Amine (AA) at a competitive international price which varies from month to month according to the market demands and the foreign exchange rate. The current monthly orders for Azithromycin APIs were 5-8 tons per month.
Pre-extraction and formulation plant development at Qionglai Facility (QLF)
In preparation for the new GMP standards stipulated by the government in early 2011, TPI initiated a process to optimize the manufacturing facilities and production lines of the Company in compliance with the new GMP standards. We received our current GMP certificate for both of our pre-extraction plant and formulate facilities until December 2015. In addition, under the guidance by provincial government, our facility is scheduled to be relocated to Qionglai County, south of Chengdu, which is designated for the pharmaceutical industry. Both the pre-extraction plant and the formulation plant will subsequently be relocated to form a combined QLF. The combined QLF, designed and constructed according to the latest GMP standards. The re-location cost for Phase I, which includes both the pre-extraction and formulation plant is estimated at $25 million, which is to boost the current capacity by at least 30-50%. The Phase II QLF, an additional $10 million may be invested to double the current capacity. By the first quarter of fiscal year 2015, the QLF construction project has been completed. TPI has just achieved GMP public notice status which is essential for the final issuance of the GMP certification which is expected by the end of December 2014.
Fiscal 2015 Guidance
The following factors, in our opinion, will influence the Company's growth perspectives for fiscal year 2015:
1. Market expansion and revenue growth of TPI's core product portfolio led
by flagship product Gingko Mihuan Oral Liquid (GMOL) and other major
products;
2. JCM revenue at both domestic and international markets in the fiscal year
2015;
3. Generic sale stabilization and recovery along with our strategy to cope
with pricing restrictions and market competition under the ongoing
healthcare reform; and
4. QLF GMP certification/relocation and smooth transition of production
capacity.
We forecast that the organic revenue growth for TPI may range from 5-10% for the fiscal year 2015. Management will continue to evaluate the Company's business outlook and communicate any changes on a quarterly basis or as when appropriate.
Non-Compliance with NYSE MKT Continued Listing Requirements
On December 16, 2014 the Company received notice from the NYSE MKT Staff indicating that the Company is below certain of the Exchange's continued listing standards, as set forth in Sections 134 and 1101 of the NYSE MKT Company Guide, due to the delay in filing of its first quarter of fiscal year 2015 Form 10-Q. The Staff further indicated to the Company that it believed that it had made a reasonable demonstration of its ability to regain compliance with the continued listing standards by the end of the Plan Compliance period, which the Staff has determined shall be no later than February 19, 2015. The Company will be subject to periodic review by Exchange Staff during the extension period. Failure to make progress consistent with the plan or to regain compliance with the continued listing standards by the end of the extension period could result in the Company being delisted from the NYSE MKT LLC.
About TPI
Headquartered at Chengdu, China, TPI is a pharmaceutical company that specializes in the development, manufacturing, marketing and sales of patented biopharmaceutical, mTCM, branded generics and API. TPI currently manufactures a comprehensive portfolio of 58 products, 24 of which are listed in the highly selective national medicine reimbursement list, 10 are included in the essential drug list (EDL) of China. TPI's pipeline targets various high incidence healthcare indications. For more information about TPI, 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: ir@tpi.asia
Web: http://www.tianyinpharma.com
Tel: +86-28-8551-6696 (Chengdu, China)
Address:
23rd Floor Unionsun Yangkuo Plaza
No. 2, Block 3, South Renmin Road
Chengdu, 610041
China
Tianyin Pharmaceutical Co., Inc.
Consolidated Balance Sheets
September 30, June 30,
2014 2014
---- ----
(Unaudited)
Assets
Current assets:
Cash and cash
equivalents $15,599,314 $16,120,041
Restricted cash 489,841 994,017
Accounts
receivable, net
of allowance for
doubtful accounts
of $102,401 at
September 30,
2014 and June 30,
2014 4,138,462 9,074,576
Inventory 5,616,924 3,841,712
Loan receivable - 1,981,280
Deferred tax
assets 996,207 1,180,510
Prepaid R&D
expenses -
current portion 3,518,667 -
Other current
assets 376,503 376,504
------- -------
Total current
assets 30,735,918 33,568,640
---------- ----------
Property and
equipment, net 46,825,853 45,378,356
Intangibles, net 27,495,028 27,699,733
Prepaid R&D
expenses 1,935,267 -
Goodwill 211,120 211,120
------- -------
Total assets $107,203,186 $106,857,849
============ ============
Liabilities and
Equity
Current
liabilities:
Accounts payable
and accrued
expenses $1,921,918 $1,592,459
Accounts payable -
construction
related 1,507,082 2,238,927
Short-term bank
loans 4,547,200 4,547,200
Due for
acquisition of
non-controlling
interests 2,436,000 -
Income tax payable 71,328 35,832
Other taxes
payable 9,072 179,610
Other current
liabilities 427,510 522,995
------- -------
Total current
liabilities 10,920,110 9,117,023
---------- ---------
Total liabilities 10,920,110 9,117,023
---------- ---------
Equity
Stockholders'
equity:
Preferred stock,
$0.001 par value,
25,000,000 shares
authorized, no
shares issued and
outstanding at
September 30,
2014 and June 30,
2014 - -
Common stock,
$0.001 par value,
50,000,000 shares
authorized,
29,546,276 shares
issued,
29,432,791 shares
outstanding at
September 30,
2014 and June 30,
2014 29,546 29,546
Additional paid-
in capital 27,809,515 30,189,802
Treasury stock,
113,485 shares at
cost (135,925) (135,925)
Statutory reserve 7,114,169 6,976,412
Retained earnings 51,041,326 50,193,258
Accumulated other
comprehensive
income 10,424,445 10,423,712
---------- ----------
Total
stockholders'
equity 96,283,076 97,676,805
Noncontrolling
interest - 64,021
--- ------
Total equity 96,283,076 97,740,826
---------- ----------
Total liabilities
and equity $107,203,186 $106,857,849
============ ============
Tianyin
Pharmaceutical Co.,
Inc.
Consolidated
Statements of
Operations
(Unaudited)
For the Three Months Ended
September 30,
-------------
2014 2013
---- ----
Sales $9,733,381 $14,748,548
Cost of sales 4,655,463 8,755,033
--------- ---------
Gross profit 5,077,918 5,993,515
Operating expenses
Selling expenses 1,628,848 2,539,244
General and
administrative
expenses 936,056 1,028,766
Research and
development 1,092,643 251,314
--------- -------
Total operating
expenses 3,657,547 3,819,324
--------- ---------
Income from
operations 1,420,371 2,174,191
Other income
(expenses):
Interest income 817 22,310
Interest expense (88,838) (102,901)
------- --------
Total other income
(expenses) (88,021) (80,591)
------- -------
Income before
provision for income
taxes 1,332,350 2,093,600
Provision for income
taxes 354,828 634,108
------- -------
Net income 977,522 1,459,492
Less: Net income
(loss) attributable
to noncontrolling
interest (8,303) (55,631)
------ -------
Net income
attributable to
Tianyin
Pharmaceutical Co.,
Inc. $985,825 $1,515,123
======== ==========
Basic and diluted
earnings per share $0.03 $0.05
===== =====
Weighted average
number of common
shares outstanding:
Basic and diluted 29,432,791 29,382,791
========== ==========
Tianyin Pharmaceutical Co.,
Inc.
Consolidated Statements of
Comprehensive Income
(Unaudited)
For the Three Months Ended
September 30,
-------------
2014 2013
---- ----
Net income $977,522 1,459,492
Other comprehensive income
(loss)
Foreign currency translation
adjustment 728 612,662
--- -------
Total other comprehensive
income 728 612,662
--- -------
Total Comprehensive income 978,250 2,072,154
Less: Comprehensive income
(loss) attributable to the
noncontrolling interest (8,308) (54,474)
------ -------
Comprehensive income
attributable to Tianyin
Pharmaceutical Co., Inc. $986,558 $2,126,628
======== ==========
Tianyin Pharmaceutical Co., Inc.
Consolidated Statements of Cash Flows
(Unaudited)
For the Three Months Ended September 30,
----------------------------------------
2014 2013
---- ----
Cash flows from operating activities:
Net Income $977,522 $1,459,492
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation and amortization 643,900 647,294
Deferred tax assets 184,303 -
Changes in current assets and current liabilities:
Accounts receivable 4,933,075 285,687
Inventory (1,774,119) 397,873
Prepaid R&D expenses (5,450,575) -
Other current assets - 313,900
Accounts payable and accrued expenses 329,256 41,043
Accounts payable - construction related (731,394) (2,728,333)
Income tax and other taxes payable (134,958) (193,381)
Other current liabilities (95,427) 22,011
------- ------
Net cash provided by (used in) operating activities (1,118,417) 245,586
---------- -------
Cash flows from investing activities:
Addition of Contruction in process (1,885,926) -
Collection of loans receivable 1,980,060 -
--------- ---
Net cash provided by investing activities 94,134 -
------ ---
Cash flows from financing activities:
Changes in restricted cash 503,866 -
Repayment of short-term bank loans - (1,623,000)
--- ----------
Net cash provided by (used in) financing activities 503,866 (1,623,000)
------- ----------
Effect of foreign currency translation on cash (310) 159,558
---- -------
Net decrease in cash and cash equivalents (520,727) (1,217,856)
Cash and cash equivalents - beginning of period 16,120,041 26,827,008
---------- ----------
Cash and cash equivalents - ending of period $15,599,314 $25,609,152
=========== ===========
Supplemental disclosures of cash activities
Cash paid for interest $83,617 $102,862
======= ========
Cash paid for income taxes $135,052 $702,609
======== ========
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SOURCE Chengdu Tianyin Pharmaceutical Co., Inc.
