Aoxing Pharmaceuticals Q2 Revenue Up 27%; Net Income $2.1 Million, Up 265%

Direct-To-Customer Sales Program Helps Raise Gross Margins To 79%

Feb 08, 2016, 08:30 ET from Aoxing Pharmaceutical Company, Inc.

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.



RELATED LINKS

http://www.aoxingpharma.com