China Yongxin Pharmaceuticals Inc. Announces Second Quarter 2009 Financial Results
Yongxin Pharmaceuticals, Inc. (OTC Bulletin Board: CYXN; “China Yongxin
Pharmaceuticals” or “the Company”), a leading manufacturer, distributor and
retailer of pharmaceuticals in
unaudited financial results for the second quarter of 2009 which ended
2009
Revenues for the second quarter of 2009 were essentially flat at
approximately
marginal increase due to an increase in revenue from its retail drug stores
offset by a decrease in volume from its pharmaceutical wholesale business.
Revenues from retail drug stores were
for the same period in 2008, which included a 10.9% increase for existing same
store sales. A broader product portfolio, in addition to increased marketing
activities, contributed to the growth. During the quarter, the Company
launched one new chain drug store in
“We believe our business during the first half of 2009 was impacted by
customers waiting for specifics on the new healthcare reform plan. On
18
included 307 commonly used pharmaceuticals. These will be subsidized by the
government to provide easier access to all citizens. China Yongxin distributes
295 products included on this list and we believe our Company will benefit
from the government’s efforts to boost domestic spending, in addition to the
new healthcare reform which is gaining momentum,” commented Mr.
Chairman and Chief Executive Officer of China Yongxin. “We have added 12 high
margin pharmaceutical products with exclusive distribution rights in
province in the first half of 2009 and we expect this to drive market share
gains and growth during the balance of this year.”
Cost of goods sold for the second quarter was approximately
yielding a gross profit of
to
quarter of 2008. The slight decrease in gross margins was primarily
attributable to the slight increase in cost of goods sold.
Operating expenses for the three months ended
million
Selling expenses for the period decreased marginally to
year ago period. The Company prudently managed utilities usage, transportation
costs and sales people to effectively reduce selling expenses and maintain
gross profit. General and administration expenses for the three months ended
million
to auditing expenses.
Operating income for the second quarter of 2009 totaled approximately
million
of 2008. Operating margins were 8.1% and 9.0% for the second quarter of 2009
and 2008, respectively.
For the second quarter of 2009, net income was approximately
a 44.8% increase from the
2008. The increase was primarily related to the absence of a
interest expense which occurred during the second quarter of 2008. Diluted
earnings per share were
and 2008 respectively, based upon 32.0 million and 32.1 million shares. The
income tax was
2008 with an effective tax rate of 28.2% in the second quarter.
Six-Month Results
For the six months ended
19.4% to
from the first six months of 2008. Gross margins were 20.8% for the first six
months of 2009 compared to 18.2% for the same period in 2008.
Income from operations was
representing a decrease of 27.6% over the first six months of 2008. Operating
margins were 7.7% for the first six months of 2009 compared to 8.6% for the
first six months of 2008. Net income decreased marginally to
the six months ended
Diluted earnings per share were
months of fiscal 2009 and 2008 respectively, based upon 32.0 million and 32.1
million shares.
Balance Sheet and Cash Flow
Cash and cash equivalents totaled
to
short-term loan payable of
stood at 43 compared to 37 in the second quarter of last year. The Company had
a current ratio of 1.8 to 1 on
million
in cash from operations versus
Business Development
On
System. To date the Company has installed 20 systems in Yongxin chain
drugstores, all located in
to remotely receive a medical diagnosis and conveniently purchase prescription
drugs at the store. The Company is always working to improve the level of
service it offers, and leverage its large and growing base of “Member”
customers who are entitled to discounts, rebates and special offers. This
strategy, in addition to selling a broader array of higher margin health,
beauty and cosmetics products, has increased customer retention and improved
revenue and profitability in this business segment.
Since the beginning of 2009, China Yongxin has signed 12 exclusive
distribution agreements for
Pharmaceutical Manufacturers including Tianjin Smith Kline & French
Laboratones Ltd. As of
drugs with exclusive distribution rights in
a key component of its long-term growth strategy to leverage the large
distribution center and channels established to drive incremental future
revenue growth. These agreements are typically one year in duration and
renewable.
China Yongxin recently secured loans from local banks and rural credit
unions totaling
renewable after the initial terms. These funds will be utilized to provide
working capital for the Company’s distribution segment as it capitalizes on
new organic growth opportunities supported by the government’s new healthcare
initiative.
“With enhanced government support, specifically the commencement of
spectrum of healthcare services and pharmaceutical products to all Chinese
residents, we are confident that our modernized logistic center and
distribution channels, broad customer base of chain drugstores, extensive
product portfolio, and committed management team will enable us to resume our
growth momentum and capitalize on a long-term, secular growth opportunity,”
concluded Mr. Liu.
About China Yongxin Pharmaceuticals, Inc.
China Yongxin Pharmaceuticals, Inc. was founded in 1993 as the Changchun
Yongxin Dirui Medical Co., Ltd. (Yongxin), a wholesale drug distributor. Its
products include Chinese traditional medicines, pharmaceutical preparations,
natural health products, health food, cosmetics, and medical equipment. It
began retail operations in 2004, and in 2005, it gained franchise rights from
one of the world’s largest drug chains for
of 2007, the Company had become one of the fastest growing pharmaceutical
companies in
wholesale distribution and manufacturing operations in
more information about China Yongxin Pharmaceuticals, please visit
http://www.yongxinchina.com .
Forward-Looking Statements
This news release contains certain “forward-looking statements.”
Forward-looking statements are based on current expectations and assumptions
and are inherently subject to risks and uncertainties, some of which cannot be
predicted or quantified, and many of which are beyond the Company’s control.
The forward-looking statements are also identified through the use of words
“believe,” enable,” “may,” “will,” “could,” “intends,” “estimate,”
“anticipate,” “plan,” “predict” “probable,” “potential,” “possible,” “should,”
“continue,” and other words of similar meaning. Actual results could differ
materially from these forward-looking statements as a result of a number of
risk factors detailed in the Company’s periodic reports filed with the SEC.
Given these risks and uncertainties, investors are cautioned not to place
undue reliance on such forward-looking statements and no assurances can be
given that such statements will be achieved. China Yongxin Pharmaceutical Inc.
does not assume any duty to publicly update or revise the material contained
herein.
For more information, please contact:
For the Company:
Mr. Sam Liu, COO
China Yongxin Pharmaceuticals, Inc.
Tel: +1-626-581-9098
Email: info@yongxinchina.com
Investors:
Mr. Matthew Hayden, HC International
Tel: +1-561-245-5155
Email: matt.hayden@hcinternational.net
Web: http://www.hcinternational.net
CHINA YONGXIN PHARMACEUTICALS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2009 AND DECEMBER 31, 2008
(UNAUDITED)
June 30, 2009 December 31, 2008
ASSETS
Current Assets:
Cash and cash equivalents $1,620,168 $609,422
Accounts receivable, net 7,070,275 6,030,874
Notes receivable 1,561,462 1,334,078
Other receivable, net 552,549 356,573
Advances to suppliers 8,465,678 6,186,269
Prepaid expenses 245,832 345,686
Inventory, net 7,923,325 7,864,677
Current assets of the discontinued
operations 46 46
Total Current Assets 27,439,336 22,727,625
Property and Equipment, net 2,512,538 2,680,207
Construction In Progress 6,357,179 6,066,249
Intangible Assets, net 60,428 73,687
Total Assets $36,369,481 $31,547,768
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $5,944,014 $3,255,148
Accrued expenses & other payable 2,694,603 2,447,067
Advances from customers 1,570,322 2,580,894
Taxes payable 1,944,665 1,240,411
Loans to related parties 184,662 184,662
Short-term loans payable 2,221,276 1,967,185
Deferred income 186,861 273,753
Current liabilities of the
discontinued operations 628,883 628,883
Total Current Liabilities 15,375,288 12,578,003
Long term loan 1,318,500 1,320,390
Commitments and Contingency -- --
Stockholders' Equity:
Preferred stock, $0.001 par value;
5,000,000 shares
authorized; 5,000,000 shares issued
and outstanding 5,000 5,000
Common stock; $0.001 par value;
75,000,000 shares
authorized; 31,510,540 shares issued
and outstanding as of June 30, 2009
and 31,400,540 shares issued and
outstanding as of December 31, 2008 31,621 31,401
Additional paid in capital 635,487 615,906
Deferred consulting expense -
issuance of warrants -- (72,815)
Prepaid consulting - issuance of
shares -- (68,750)
Receivable from a related party (50,000) (50,000)
Statutory reserve 2,050,992 1,841,241
Other comprehensive income 1,660,196 1,684,649
Retained earnings 10,818,845 9,563,803
Non-controlling interest 4,523,552 4,098,940
Total Stockholders' Equity 19,675,693 17,649,375
Total Liabilities and Stockholders'
Equity $36,369,481 $31,547,768
CHINA YONGXIN PHARMACEUTICALS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE-MONTH AND SIX-MONTH PERIODS ENDED JUNE 30, 2009 AND 2008
(UNAUDITED)
For the Three-Month For the Six-Month
Period Period
Ended June 30, Ended June 30,
2009 2008 2009 2008
Net Revenues $14,638,615 $14,580,500 $23,823,609 $29,574,097
Cost of Goods Sold (11,920,027) (11,723,541) (18,874,297) (24,190,231)
Gross profit 2,718,588 2,856,959 4,949,312 5,383,866
Operating Expenses:
Selling expenses 763,290 963,352 1,583,452 1,724,373
General and
administrative
expenses 767,160 587,915 1,521,874 1,113,315
Total operating
expenses 1,530,449 1,551,267 3,105,325 2,837,688
Income From Operations 1,188,139 1,305,692 1,843,986 2,546,178
Other Income
(Expense):
Other income 706,758 600,205 794,555 834,140
Other expense (47,160) 103,634 (20,783) (34,906)
Interest income
(expense) 16,458 (225,005) 7,984 (227,112)
Total other income 676,057 478,834 781,757 572,122
Operating Income
Before Income Tax and
Non controlling
Interest 1,864,196 1,784,526 2,625,743 3,118,300
Provision for income
tax (525,801) (565,227) (730,566) (940,142)
Net Income Before Non
controlling Interest 1,338,394 1,219,299 1,895,177 2,178,158
Non controlling
interest (297,801) (500,378) (430,386) (691,881)
Net Income 1,040,594 718,921 1,464,791 1,486,277
Other Comprehensive
Item:
Foreign exchange
translation gain (42,017) 294,872 (18,340) 836,712
Net Comprehensive
Income 998,577 1,013,793 1,446,451 2,322,989
Earning per share
Basic $0.03 $0.02 $0.05 $0.05
Diluted $0.03 $0.02 $0.05 $0.05
Weighted average
number of shares
outstanding
Basic 31,148,219 31,116,845 31,095,623 31,079,138
Diluted 32,048,219 32,144,356 31,995,623 32,106,649
CHINA YONGXIN PHARMACEUTICALS INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JUNE 30, 2009 AND 2008
(UNAUDITED)
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income attributable to the
company $1,464,791 $1,486,277
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 152,845 167,869
Stocks and warrants issued or to be
issued for services 61,750 141,566
Amortization of prepaid & deferred
consulting cost 141,565
Non-controlling interest 430,386 691,881
(Increase) / decrease in current
assets:
Accounts receivable (1,048,523) (3,183,428)
Notes receivable (229,403) --
Other receivable (196,580) (799,159)
Advances to suppliers (2,289,358) 2,077,575
Prepaid expenses 99,406 (70,437)
Inventory (69,939) (1,556,377)
Increase / (decrease) in current
liabilities:
Accounts payable 1,768,564 1,342,605
Notes payable 552,449 --
Other payable 677,711 2,571
Accrued expense (107,245) --
Tax payable 706,368 857,194
Advances from customers (1,007,358) 1,047,628
Deferred revenue (86,541) (249,545)
Net cash provided by operating
activities 1,020,888 1,956,221
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from minority interest
shareholders -- 11,406
Additions to construction in progress (275,529) --
Purchase of property, equipment and
intangible assets -- (2,626,220)
Net cash used in investing activities (275,529) (2,614,813)
CASH FLOWS FROM FINANCING ACTIVITIES
Receipt of short term loan -- 1,964,749
Receipts of loan from non-related
parties 256,843 --
Receipts of Loan from related parties -- (1,620,887)
Net cash provided by financing
activities 256,843 343,863
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,002,201 (314,730)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH AND CASH EQUIVALENTS 8,545 225,092
CASH AND CASH EQUIVALENTS, BEGINNING
BALANCE 609,422 1,180,029
CASH AND CASH EQUIVALENTS, ENDING
BALANCE $1,620,168 $1,090,389
SUPPLEMENTAL DISCLOSURES:
Interest paid $71,126 $101,631
Income tax paid $19,097 $--
NON CASH TRANSACTION:
Conversion of account receivable to
note receivable $-- $841,686
SOURCE China Yongxin Pharmaceuticals, Inc.