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China Medicine Reports Third Quarter Results


编辑:AG88 时间:2018-10-01

GUANGZHOU, China, Dec. 4 /PRNewswire-FirstCall/ -- China Medicine

Corporation (OTC Bulletin Board: CHME), a leading distributor of medical

products, traditional pharmaceutical and Chinese medicines, herbs and dietary

supplements today is reporting third quarter financial results for the period

ending September 30, 2006.

Key Financial Indicators

(All numbers in thousands, except per share amounts in USD)

Q3 2006 Q3 2005 Percentage Change

Revenues $ 6,367 $ 2,576 147.2%

Cost of goods sold $ 4,490 $ 1,716 161.6%

Gross Profit $ 1,877 $859 118.3%

Total Operating

Expenses $217 $ 217 0.3%

Operating Income $ 2,890 $ 1,095 163.8%

Net Income $ 2,277 $ 1,506 51.3%

Fully Diluted EPS $ 0.29 $ 0.23 26.1%

Financial Results

For the third quarter ended September 30, 2006, the Company reported

revenue of $6.4 大发电玩城million as compared to $2.6 million during the third quarter

last year, representing a 147.2 percent increase. Revenue growth was driven

by a substantial increase in product sales, specifically related to the

acquisition of distribution rights for three new products acquired in the

second half of 2005 and an overall increase in the number of new distribution

customers. Gross profit was $1.9 million as compared to $0.9 million during

the third quarter last year, representing an increase of 118.3 percent. Gross

margins for the quarter were 29.5 percent as compared to 33.3 percent last

year with the year over year decrease primarily related to lower medicine

prices on certain products as mandated by the Chinese government beginning in

early 2006.

Operating income increased 163.8 percent to $2.9 million for the third

quarter 2006 as compared to operating income of $1.1 million for the same

period last year resulting in a 2.9 percent increase in operating margins to

45.4 percent. Included in operating income for the third quarter 2006 was

$1.3 million in other non operating income as compared to $0.5 million last

year which represent proceeds from the sale of certain pharmaceutical

technology and know-how to certain non-affiliated drug manufactures.

"During the third quarter we generated higher overall revenues as a

result of our expanded product portfolio and increasing customer count,"

commented Mr. Senshan Yangchairman and CEO of China Medicine

Corporation. "The secular trend towards increased domestic consumption of

pharmaceutical products continues as growing numbers of Chinese citizens

become more health conscious and have more disposable income to treat their

ailments. Based on our diversified product portfolio we believe we are fairly

well positioned to participate in this future growth."

Net income for the third quarter increased 51.3 percent to approximately

$2.3 million, or $0.29 per weighted average fully diluted share as compared

to $0.23 in the year ago period. The Company incurred taxes at a rate of 17.3

percent as compared to no tax expense in the third quarter 2005. In

calculating fully diluted earnings per share, the Company utilized 7.7

million weighted average fully diluted outstanding shares as compared to 6.5

million in the same period a year ago. Including all warrants and shares

outstanding the fully diluted share for the Company is 19.5 million.

"We are actively looking to expand our proprietary product offering to

complement our existing distribution business and take advantage of a growing

push towards the use of Chinese based herbal remedies in the market,"

commented Ms. Huizhen YuChief Financial Officer of China Medicine

Corporation. "We believe our own internally developed products address large

and growing market opportunities with the increase in this business having

favorable long-term margin implications for the Company. As we progress

toward 2007 our goal is to have a larger contribution of proprietary products

as a percentage of our overall revenue."

For the nine months ending September 30, 2006 revenues increased 68.9

percent to $13.9 million. Gross profit increased 81.5 percent to $4.0 million

resulting in gross margins of 28.5 percent as compared to 33.5 percent last

year. Gross margins on a comparable basis were impacted by the aforementioned

price reductions on certain products as mandated by the Chinese government.

Operating income for the period totaled $3.3 million, or an 11.0 percent

decrease as compared to $3.7 million in the comparable period last year.

During the first nine months of 2006 the Company incurred approximately $0.9

million in additional costs related to being a US publicly traded company as

compared to no such expense last year. In each case operating income

benefited from $1.6 million in other operating income respectively for each

period. Net income decreased 41.5 percent to $2.4 as a result of lower gross

margins, higher public company costs and taxes of $0.7 million. Weighted

average fully diluted earnings per share were $0.31 versus $0.62 in the year

ago period as the Company utilized 7.6 million and 6.5 million shares

respectively.

The Company maintained working capital of $9.8 million as of the end of

the third quarter 2006. Cash used in operations for the nine months period of

this year was $0.7 million which was primarily impacted by an increase in

total receivables. Total receivables at the end of the third quarter were

$5.7 million and management believes these receivables are in good standing

based on current customer quality. Shareholder’s equity increased 143.5

percent to $11.6 million as compared to the end of 2005.

About China Medicine Corporation:

China Medicine is a distributor of medical products, traditional

pharmaceutical medicines, traditional Chinese medicines, Chinese herbs and

dietary supplements to over 28 provinces and 2,500 customers within China.

The Company sells more than 1,100 products and is actively building a

pipeline of proprietary traditional and Chinese herbal remedy products

targeting oncology, high blood pressure and the removal of Aflatoxins from

food and animal feed. For more information visit the Company’s website at

http://www.chinamedicinecorp.com.

Safe Harbor Statement:

This press release contains forward-looking statements concerning China

Medicine Corporation’s business and products. The actual results may differ

materially depending on a number of risk factors including, but not limited

to, the following: general economic and business conditions, development,

shipment, market acceptance, additional competition from existing and new

competitors, changes in technology, and various other factors beyond its

control. All forward-looking statements are expressly qualified in their

entirety by this Cautionary Statement and the risks factors detailed in the

Company’s reports filed with the Securities and Exchange Commission. China

Medicine Corporation undertakes no duty to revise or update any forward-

looking statements to reflect events or circumstances after the date of this

release.

CHINA MEDICINE CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

ASSETS

3 months ended Fiscal year end

CURRENT ASSETS September 30, 2006 December 31, 2005

Cash $642,023 $ 91,964

Accounts receivable, trade,

net of allowance for doubtful

accounts 5,569,669 2,410,824

Investment 784,920

Inventories 1,510,141 1,382,929

Other receivables 167,362 38,301

Advances to suppliers 2,447,416 1,075,546

Total Current Assets 11,121,531 4,999,564

EQUIPMENT, NET 1,731,527 330,015

TOTAL ASSETS $12,853,058 $5,329,579

LIABILITIES AND STOCKHOLDERS’ EQUITY

CURRENT LIABILITIES

Accounts payable, trade $176,081 $170,196

Short-term loans 95,480

Other payables and accrued liabilities 101,945 97,449

Customer deposits 34,307 37,292

Taxes payable 907,000 170,456

Total Current Liabilities 1,219,333 570,873

OTHER LIABILITIES:

Contingent liabilities 44,003

TOTAL LIABILITIES 1,263,336 570,873

STOCKHOLDERS’ EQUITY

Preferred stock, $0.0001 par value;

10,000,000 shares authorized,

3,120,000 shares issued and

outstanding 312

Common stock, $0.0001 par value;

$90,000,000 shares authorized,

7,380,000 shares issued and

outstanding 738 653

Paid-in capital 4,375,517 120,347

Statutory reserves 722,909 722,909

Retained earnings 6,189,274 3,813,665

Accumulated other comprehensive income 300,972 101,132

Total shareholders’ equity 11,589,722 4,758,706

TOTAL LIABILITIES AND STOCKHOLDERS’

EQUITY $ 12,853,058 $ 5,329,579

CHINA MEDICINE CORPORATION AND SUBSIDIARY

(FORMERLY KNOWN AS LOUNSBERRY HOLDINGS III, INC.)

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

FOR THE THREE MONTHS AND NINE MONTHS ENDED SEPTEMBER 30, 2006 AND 2005

For the For the

For the three For the nine

three months nine months

months ended ended months ended ended

Sep 30, Sep 30, Sep 30, Sep 30,

2006 2005 2006 2005

REVENUES $6,366,619 $2,575,896 $13,856,558 $8,206,063

COST OF GOOD SOLD 4,490,055 1,716,375 9,910,331 5,459,973

GROSS PROFIT 1,876,564 859,521 3,946,227 2,746,090

OTHER OPERATING INCOME 1,229,912 452,024 1,589,136 1,555,693

OPERATING EXPENSES

Research and

development expenses 31,361 109,606 270,702 314,580

Selling, general and

administrative

expenses 185,517 106,649 1,084,194 336,411

Reverse acquisition

expense - - 931,270 -

Total Operating

Expenses 216,878 216,255 2,286,166 650,991

INCOME FROM OPERATIONS 2,889,598 1,095,290 3,249,197 3,650,792

OTHER INCOME (EXPENSES) 136,645 410,203 143,757 410,175

INCOME BEFORE INCOME

TAXES 2,752,953 1,505,493 3,105,440 4,060,967

PROVISION FOR INCOME

TAXES 475,574 - 729,831 -

NET INCOME 2,277,379 1,505,493 2,375,609 4,060,967

OTHER COMPREHENSIVE

INCOME

Foreign currency

translation gains 128,142 47,849 199,840 47,849

COMPREHENSIVE INCOME $2,405,521 1,553,342 $2,575,449 $4,108,816

Earning per share-basic $0.31 0.23 $0.33 $0.62

Earning per share-diluted $0.29 0.23 $0.31 $0.62

Weighted average number

of shares 7,380,000 6,530,000 7,250,926 6,530,000

outstanding-basic

Weighted average number

of shares 7,749,000 6,530,000 7,563,893 6,530,000

outstanding-diluted

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