China Yongxin Pharmaceuticals Inc., a vertically integrated health products company in China, today announced its financial results for the year ended December, 31, 2009.
The company’s 2009 net income increased 26 percent to $5.1 million, up from the $4.1 million reported in 2008. The company attributes the increase to higher margin sales and an increase in profits driven by retail product sales.
Revenues for the year ended December 31, 2009, decreased 19.5 percent to $47.6 million compared to $59.1 million for 2008. The decrease was due to the switch from a wholesale business strategy to the retail and medical facilities sector.
Basic and diluted earnings per share increased to $0.15 for the year ended December 31, 2009, compared to $0.13 for 2008, based on 35.1 million and 31.2 million diluted weighted average shares outstanding for 2009 and 2008, respectively, and 33.2 million and 31.2 million basic weighted averages shares outstanding for 2009 and 2008, respectively. The company noted that these shares do not include the roughly 1.67 million shares of preferred stock owned by management, which is convertible into 10 million shares of common stock.
China Yongxin improved its gross profit margin by approximately 37.2 percent from $11.9 million in 2008 to $16.3 million in 2009, reflecting higher margin retail and medical facilities sales.
From the beginning of 2009 to-date, China Yongxin has signed 12 exclusive distribution agreements for high-margin pharmaceutical products with several well-known pharmaceutical manufacturers in the Jilin province. As of June 30, 2009, the company has approximately 216 drugs with exclusive distribution rights in the province.
Yongxin Liu, chairman and CEO of China Yongxin, said the company’s solid improvement in 2009 reflects its position in the market, as well as governmental backing.
“Our income growth in 2009 indicates that our business model has placed the company in a strong position to take positive advantage of increased government support of health care and the continued expansion of the economy in China,” Liu stated in the press release.