Aoxing Pharmaceutical Company Announces Third Quarter Fiscal 2012 Financial and Operational Results
(firmenpresse) - JERSEY CITY, NJ -- (Marketwire) -- 05/15/12 -- Aoxing Pharmaceutical Company, Inc. (NYSE Amex: AXN) ("Aoxing Pharma"), a specialty pharmaceutical company focusing on research, development, manufacturing, and distribution of narcotic, pain-management, and addiction treatment pharmaceuticals, today announced its financial and operational results for its third fiscal quarter, which ended on March 31, 2012.
Sales for the quarter ended March 31, 2012 were $1,807,284, representing an 11% increase over the sales of $1,628,627 realized during the third quarter of the last fiscal year. For the nine months ended March 31, 2012, sales were $5,461,685, a 3% increase from sales of $5,309,839 realized during the same period in 2011. Sales of the Company's main product, Zhongtongan, increased significantly from the same periods in 2011, mainly due to increased promotional efforts. At the same time, sales of certain other products declined, as the Company has reduced promotional efforts on certain non-proprietary products.
For the quarter ended March 31, 2012, gross margin was 55.9%, significantly higher than the gross margin of 50.4% realized during the same period a year earlier. For the nine months ended March 31, 2012, gross margin was 57.8%, 3.2% higher than the gross margin of 54.6% for the same period a year earlier. During the nine months ended March 31, 2012, gross margin has been negatively influenced by higher raw material costs. However, the effect was more than offset by product mix shift (lower sales of low margin products) as well as overall manufacturing efficiency enhancement.
General and administrative expenses were $699,678 in the three months ended March 31, 2012, 48.7% lower than $1,364,117 incurred in the same period a year earlier. For the nine months ended March 31, 2012, general and administrative expenses were $2,210,489, 41.6% lower than $3,785,867 incurred during the nine months a year earlier. The main reasons for the decreases were the Company's effort to reduce costs and lower bad debt expenses. The Company increased its efforts to collect outstanding receivables during the period. The result was a decrease in bad debt expenses by $235,676 and $693,027 for the three and nine months ended March 31, 2012 compared to the same periods in the prior year. Other factors contributing to the decrease in general and administrative expenses included lower consulting fees and office expenses.
During the quarter ended March 31, 2012, the Company recorded a full valuation allowance for its deferred tax asset balance related to China. The deferred tax assets are substantially related to loss carry forwards for the past 5 years under Chinese tax law. At the end of 2011, the local Food and Drug Administration implemented a Chinese medical reform program for certain essential medicines, which limits unit price. Over 50,000 state owned primary-level medical and health care institutions are using this basic drug program, and the selling price of the affected drugs decreased by 30%. In addition, on April 15, 2012, a famous Chinese TV program 'Weekly Quality Report' disclosed that certain pharmaceutical enterprises purchased capsule medication containing excessive amount of chromium, which is hazardous to human health. Immediately the State Food and Drug Administration ("SFDA") began a nation-wide drug safety investigation. This resulted in the SFDA deferring all new drug approvals. The negative impact of these events on the selling prices of our current products and the expected delays in approval of our two new medicines caused the Company to reassess the forecasted future taxable income that is the basis for recording the deferred tax asset. Because of that reassessment, the Company provided a full valuation allowance of $2,815,771 for the deferred tax assets from China as of March 31, 2012, which increased the net loss for the three and nine month periods ending March 31, 2012 by that amount. Therefore, the after-tax net loss attributable to the shareholders was $3,204,384 for the three months ended March 31, 2012 and $4,309,388 for the nine months ended March 31, 2012.
In the three months ended March 31, 2012, the Company's subsidiary in China, Hebei Aoxing, received three local government subsidies totaling RMB 2,230,000 (approximately $351,185). In the same period in 2011, there was no such income. These government subsidies have no restrictions and are for operating activities.
Last month the Company completed its submission of the New Drug Application (NDA) of Tongjingshule (TJSL) for the indication of Primary Dysmenorrha ("PD"), or menstrual pain, in adult women. TJSL is a capsule form of selected herbal medicine. The market for healthcare products to address menstrual pain is estimated at $3 billion per year in China.
our Chairman and CEO, commented, "The Chinese pharmaceutical market remained challenging during the quarter. I am pleased with Aoxing's operating results highlighted by continued growth in product sales and reduction of operating expenses."
Aoxing Pharmaceutical Company, Inc. is a US incorporated specialty 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 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 State Food and Drug Administration (SFDA). It has a joint venture collaboration with Johnson Matthey Plc to produce and market narcotics and neurological drugs in China. It also has strategic alliance partnerships with QRxPharma, and Phoenix PharmaLabs, Inc. For more information, please visit: .
Certain statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. All forward-looking statements included herein are based upon information available to the Company as of the date hereof and, except as is expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "guidance," "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. The economic, competitive, governmental, technological and other risk factors identified in the Company's filings with the Securities and Exchange Commission, specifically, Item 1A, "Risk Factors," in the Form 10-K for the year ended June 30, 2011, may cause actual results or events to differ materially from those described in the forward looking statements in this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.
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Datum: 16.05.2012 - 00:02 Uhr
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News-ID 146986
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