China Yongxin Pharmaceuticals, Inc. Announces Results for the Third Quarter Ended September 30, 2009
China Yongxin Pharmaceuticals, Inc. (OTC Bulletin Board: CYXN) (“Yongxin” or
“the Company”), a leading pharmaceutical distributor and chain drugstore
operator, today announced financial results for the third quarter ended
“While we recognize that many of our products depend on discretionary
spending, we expect as the economy continues to recover and consumer
confidence picks up further, sales will gain momentum in 2010 and beyond. In
the third quarter, we maintained our sales activities and saw improved gross
margin as the Company’s shift to higher margin products in its retail segment
contributed to a more profitable mix of business. Management believes that
overall gross profit will continue to improve for the remainder of 2009 and
into next year,” commented Mr.
Officer of Yongxin.
“Further, we have initiated distribution of essential drugs and believe
the government’s new efforts on centralized distribution and the broader
healthcare reform provide a myriad of growth opportunities. As one of the
leading drug distributors in
capitalize on these developments and build sustainable and long-term
shareholder value,” concluded Mr. Liu.
Highlights for the three months Ended
Net revenue totaled approximately
of 2008, due to lower sales from the Company’s wholesale business as result of
a change in its sales strategy. In the third quarter, Yongxin shifted its
focus to the retail sector as the benefits from
Medical Policy for the Company’s wholesale business segment have taken longer
than initially anticipated.
Cost of goods sold for the third quarter of 2009 decreased to
million
third quarter, largely in line with sales decline.
Gross profit for the three months ended
million
19.7% of net sales, for the same period of 2008. The improvement in gross
margin was mainly due to a better sales mix and a focus on higher margin
products, including cosmetics and certain health and organic products.
Operating expenses totaled approximately
quarter of 2009, up 168.7% from
a percentage of net revenue, third-quarter 2009 total operating expenses
amounted to 30.4%, compared to third-quarter 2008 operating expenses at 7.9%
of net revenue. This was largely attributable to a sharp increase in general
and administrative expenses, which more than quintupled in the third quarter,
primarily driven by allowance for doubtful accounts for accounts receivable
and accrued litigation fees. Selling expenses rose moderately by 6.3% as the
Company opened two new retail stores during the third quarter.
Other income amounted to
30, 2009
largely due to higher sponsorship and rebates from customers and suppliers in
combination with an 87.6% decline in interest expenses.
The Company’s net income attributable to common shares during the three
months ended
for the three months ended
operating expenses, third-quarter net income was also negatively affected by a
change in the collection of sponsorship fees and rebates from customers and
suppliers from an annual basis to a quarterly basis.
The earnings per basic and diluted share were
ended
30, 2008
Nine Months Results Ended
Total revenue for the first nine months of 2009 was approximately
million
first nine months of 2009 was
profit of
27.8% for the first nine months of 2009, up from 18.7% for the same period in
2008. The Company recorded an operating income of
operating income of
attributable to common shares for the first nine months of 2009 was
million
and diluted earnings per share were
compared to 0.10 in the first nine months of 2008.
Financial Condition
As of
equivalents, and approximately
nine months of 2009, the Company generated
operations versus
Recent Events
Yongxin announced on
distribution of medicines on the Essential Drug List, which was recently
formalized by the Chinese government. Drugs on the National Essential Drugs
List will be purchased and distributed to medical facilities including
hospitals, clinics, pharmacies, etc. All drugs on the List will be covered by
the basic insurance plan supported by the government. The government will
invite public bidding for centralized distribution for essential drugs.
Currently, Yongxin distributes 297 products out of 307 drugs listed on EDL.
As one of the top medicine distributors in
pharmaceutical logistic center, China Yongxin launched corresponding business
preparation for public bidding and distribution for the first batch of 138
township hospitals and 11 city hospitals in
public bidding is expected to be announced before the end of 2009. The winning
of first batch will increase revenues of drug distribution and will help
facilitate winning other batches of hospitals.
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
For 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.
CHINA YONGXIN PHARMACEUTICALS INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 2009 AND DECEMBER 31, 2008
(UNAUDITED)
September 30, December 31,
2009 2008
ASSETS
Current Assets:
Cash and cash equivalents $1,371,842 $609,422
Accounts receivable, net 6,622,395 6,030,874
Notes receivable 3,074,753 1,334,078
Other receivable, net 2,823,356 356,573
Advances to suppliers 6,576,641 6,186,269
Prepaid expenses -- 345,686
Inventory, net 8,747,431 7,864,677
Total Current Assets 29,216,418 22,727,579
Property and Equipment, net 8,733,094 2,680,207
Construction In Progress 913,054 6,066,249
Intangible Assets, net 47,324 73,687
Total Assets $38,909,890 $31,547,722
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $4,923,000 $3,255,148
Accrued expenses & other payable 4,496,232 2,412,067
Advances from customers 2,901,552 2,580,894
Tax payable 2,183,714 1,240,411
Loans to related parties 184,662 184,662
Short-term loans payable 1,439,578 1,967,185
Deferred income 305,340 273,753
Shares to be issued 47,000 35,000
Net liabilities of discontinued operations 628,837 628,837
Total Current Liabilities 17,109,915 12,577,957
Long term loan 1,320,300 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; 32,110,540 shares issued
and outstanding as of September 30, 2009
and 31,400,540 shares issued and outstanding
as of December 31, 2008 32,111 31,401
Additional paid in capital 719,536 615,906
Deferred consulting expense - issuance of
warrants (11,850) (72,815)
Prepaid consulting - issuance of shares (12,500) (68,750)
Receivable from a related party (50,000) (50,000)
Statutory reserve 2,170,805 1,841,241
Other comprehensive income 1,685,247 1,684,649
Retained earnings 11,171,145 9,563,803
Non-controlling interest 4,770,180 4,098,940
Total Stockholders' Equity 20,479,675 17,649,375
Total Liabilities and Stockholders' Equity $38,909,890 $31,547,722
CHINA YONGXIN PHARMACEUTICALS INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE-MONTH AND NINE-MONTH PERIODS ENDED
SEPTEMBER 30, 2009 AND 2008
(UNAUDITED)
For the Three-Month For the Nine-Month
Periods Ended Periods Ended
September 30, September 30,
2009 2008 2009 2008
Net Revenues $10,844,786 $15,451,100 $29,199,325 $45,025,197
Cost of Goods Sold (7,685,369) (12,412,576) (21,090,595) (36,602,807)
Gross profit 3,159,417 3,038,524 8,108,730 8,422,390
Operating Expenses:
Selling expenses 912,094 858,038 2,495,546 2,582,411
General and
administrative
expenses 2,386,349 369,471 3,908,223 1,482,786
Total operating
Expenses 3,298,443 1,227,509 6,403,769 4,065,197
Income (Loss) From
Operations (139,026) 1,811,015 1,704,961 4,357,193
Other Income (Expense):
Other income 1,112,309 683,618 1,906,864 1,517,758
Other expense (19,981) (42,745) (40,763) (77,651)
Interest income
(expense) (6,919) (55,845) 1,066 (282,957)
Total other income 1,085,409 585,028 1,867,166 1,157,150
Operating Income Before
Income Tax and Non
controlling Interest 946,383 2,396,043 3,572,127 5,514,343
Provision for income tax (233,908) (547,088) (964,474) (1,487,230)
Net Income Before Non
controlling Interest 712,475 1,848,955 2,607,653 4,027,113
Non controlling interest (240,362) (191,894) (670,747) (883,775)
Net Income 472,113 1,657,061 1,936,906 3,143,338
Other Comprehensive
Item:
Foreign exchange
translation gain 18,938 26,258 598 862,970
Net Comprehensive Income 491,051 1,683,319 1,937,504 $4,006,308
Earning per share
Basic $0.01 $0.05 $0.06 $0.10
Diluted $0.01 $0.05 $0.06 $0.10
Weighted average number
of shares outstanding
Basic 31,667,062 31,291,845 31,288,904 31,150,819
Diluted 32,125,923 31,291,845 31,747,765 31,150,819
SOURCE China Yongxin Pharmaceuticals, Inc.