TPI Presents Unaudited Preliminary First Quarter Fiscal Year 2015 Financial Results

24 Dec, 2014, 17:36 ET from Chengdu Tianyin Pharmaceutical Co., Inc.

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

 

SOURCE Chengdu Tianyin Pharmaceutical Co., Inc.



RELATED LINKS

http://www.tianyinpharma.com