Financial Highlights
? Net revenues for the twelve months ended June 30, 2012 increased 68.9% to $137.4 million compared to the same period in 2011.
o 68% of net revenues was from Bohai and 32% was from Yantai Tianzheng this fiscal year compared to the last fiscal year.
o Sales were mostly derived from our lead products, Lung Nourishing Syrup, Tongbi Capsules, Tongbi Tablets, Fangfengtongsheng Granule, and Zhengxintai Capsules, which together represented over 77.4% of our total net revenues for the twelve months ended June 30, 2012, respectively.
o 78% of net revenue was derived from sales of prescription products and 22% was from Over-the-Counter products for the twelve months ended June 30, 2012.
? Non-GAAP net income for the twelve months ended June 30, 2012 increased 62.4% to $19.1 million compared to the same period in 2011. The difference was mainly due to increased net income offset by net increase in change in fair value of warrants of $4.8 million in the twelve months ended June 30, 2012 compared to the same period in last year and change in Amortization of beneficial conversion features on convertible notes converted of $8.3 million in the twelve months ended June 30,2012 compared to the same period in last year. (See above Use of Non-GAAP Financial Measures). GAAP net income for the twelve months ended June 30, 2012 decreased 31.1% to $9.6 million compared to the same period in 2011.
o Income from operations increased 55.4% to $28.4 million this fiscal year compared to the last fiscal year.
o Net income margin decreased from 17.2% for the twelve months ended June 30, 2011 to 7.0% for the twelve months ended June 30, 2012. The decrease was mainly due to the net increase in certain non-cash activities such as effective interest charges from convertible notes and deferred income tax expenses as well as increase in selling related expenses.
o Included in the net income this fiscal year ended June 30, 2012 were a non-cash charge in deferred income tax expenses of $0.8 million, and a non-cash credit of $0.3 million in changes in fair value of warrants.
? Basic and diluted earnings per share were $0.54 and $0.54 for the twelve months ended June 30, 2012.
o Non-GAAP Diluted earnings per share increased 62.1% to $1.07for the twelve months ended June 30, 2012 compared to the same period in 2011.
o Non-GAAP Basic earnings per share increased 57.4% to $1.07for the twelve months ended June 30, 2012 compared to the same period in 2011.
? Including restricted cash, our total cash balance was $27.8 million as of June 30, 2012 and cash flow from operating activities was $20.6 million for the twelve months ended June 30, 2012.
o Total cash and cash equivalents increased by $5.0 million for the twelve months ended June 30, 2012 compared to June 30, 2011.
o Major cash payment activities for the twelve months ended June 30, 2012 included $3.1 million for the repayment of short term bank loans and $9.7 million paid for acquisition.
