SOURCE: Aoxing Pharmaceutical Company, Inc.

May 16, 2016 08:00 ET

Aoxing Pharmaceutical Reports Q3 Fiscal 2016 Financial Results

FOSTER CITY, CA--(Marketwired - May 16, 2016) - Aoxing Pharmaceutical Company, Inc. (NYSE MKT: AXN) today announced that for the third quarter of fiscal year 2016, ended March 31, 2016, the Company reported revenues of $6,563,944, a modest decline of 0.4% year-over-year from the revenues of $6,590,736 realized during the three months ended March 31, 2015. When the revenues are stated in the local currency (RMB), revenues in the fiscal third quarter increased 6.5% year-over-year. Fiscal third quarter is a relatively slow quarter, mainly due to reduced sales activities during the Chinese New Year holidays, which typically happen during January and February. Also, we noticed that there was some impact of timing on revenue, as several key orders were shifted from the fiscal third quarter to the fiscal fourth quarter. We also noted that inventories in the distribution channels were relatively low at the end of the fiscal third quarter 2016, which is usually a good predictor of increased sales activities in the following quarter.

The Company's net income in Q3 of fiscal year 2016 was $622,720, or $0.01 per share, compared to $777,976, or $0.01 per share, for the three months ended March 31, 2015.

Aoxing's cash balance as of March 31, 2016 was $6,046,327, compared to $5,371,545 as of June 30, 2015, the end of its last fiscal year.

Mr. Zhenjiang Yue, Chairman and CEO of Aoxing Pharma, said, "While fiscal third quarter is a relatively slow quarter due to Chinese New Year holidays, we do see a significant revenue growth for our products other than Zhongtong'an. We believe strong sales growth for our Zhongtong'an product will continue in the fiscal fourth quarter, and we are still trying to achieve our sales target for the fiscal year 2016 despite the slowdown in sales growth in the third quarter of fiscal year 2016. For our Tilidine tablets, we are now near the end of the preparation work. The Tilidine tablets from the API procurement and production to distribution are regulated and tracked by the relevant government agencies, and we have recently received the related documentation from the government. At this point, we expect Tilidine tablet production to start by the end of the fiscal year 2016."

About the Company:

Aoxing Pharmaceutical Company, Inc. is a U.S. incorporated 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 Pharma 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 Food and Drug Administration ("CFDA"). For more information, please visit: www.aoxingpharma.com.

Safe Harbor Statement:

This press release contains certain statements that may include "forward-looking statements." All statements other than statements of historical fact included herein are "forward-looking statements." These forward-looking statements are often identified by the use of forward-looking terminology such as "believes," "expects" or similar expressions, involving known and unknown risks and uncertainties. Although the Company believes that the expectations reflected in these forward-looking statements are reasonable, they do involve assumptions, risks and uncertainties, and so these expectations may prove to be incorrect. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company's actual results could differ materially from those anticipated in these forward-looking statements as a result of a variety of factors, including the risk factors discussed in the Company's periodic reports that are filed with the Securities and Exchange Commission and available on the SEC's website (http://www.sec.gov). All forward-looking statements attributable to the Company or persons acting on its behalf are expressly qualified in their entirety by these risk factors. Other than as required under the securities laws, the Company does not assume any duty to update these forward-looking statements.

   
AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES  
CONSOLIDATED BALANCE SHEETS  
   
    March 31,     June 30,  
    2016     2015  
ASSETS   (Unaudited)        
CURRENT ASSETS:                
Cash and cash equivalents   $ 6,046,327     $ 5,371,545  
Accounts receivable, net     9,003,401       5,764,738  
Notes receivable, net     16,678       89,317  
Inventories, net     3,761,697       3,240,026  
Prepaid expenses and other current assets     10,490,462       6,630,407  
TOTAL CURRENT ASSETS     29,318,565       21,096,033  
               
LONG-TERM ASSETS:              
Property and equipment, net of accumulated depreciation     26,589,023       28,651,717  
Deferred income tax     1,087,218       2,711,610  
Other intangible assets, net     1,905,169       484,857  
Investment in joint venture     29,036       96,475  
TOTAL LONG-TERM ASSETS     29,610,446       31,944,659  
TOTAL ASSETS   $ 58,929,011     $ 53,040,692  
                 
LIABILITIES AND SHAREHOLDERS' EQUITY                
                 
CURRENT LIABILITIES:                
Short-term borrowings   $ 11,513,301     $ 12,484,356  
Accounts payable     2,566,203       3,625,139  
Notes payable           1,631,641  
Loan payable - bank     15,035,344       16,316,408  
Current portion of loan payable - related parties     13,544       5,793  
Current portion of loan payable - others     15,502       -  
Accrued expenses and other current liabilities     8,884,490       7,176,325  
TOTAL CURRENT LIABILITIES     38,028,384       41,239,662  
               
LONG-TERM LIABILITIES:              
Loan payable - related parties     -       8,158  
Loan payable - others     -       1,361,199  
Deferred income     350,344       368,751  
TOTAL LONG-TERM LIABILITIES     350,344       1,738,108  
                 
Common stock, par value $0.001, 100,000,000 shares authorized, 72,252,200 and 69,839,259 shares issued and outstanding on September 30, 2015 and June 30, 2015     76,209       69,839  
Additional paid in capital     73,582,257       66,457,250  
Accumulated deficit     (54,395,676 )     (58,354,968 )
Accumulated other comprehensive income     2,257,488       3,066,026  
TOTAL SHAREHOLDERS' EQUITY OF THE COMPANY     21,520,278       11,238,147  
               
NONCONTROLLING INTEREST IN SUBSIDIARIES     (969,994 )     (1,175,225 )
TOTAL EQUITY     20,550,284       10,062,922  
               
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 58,929,012     $ 53,040,692  
                 
   
AOXING PHARMACEUTICAL CO., INC. AND SUBSIDIARIES  
CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME (LOSS)  
(Unaudited)  
   
    For the three months ended     For the nine months ended  
    March 31,     March 31,  
    2016     2015     2016     2015  
                           
SALES   $ 6,563,944     6,590,736     23,504,605     17,586,519  
COST OF SALES     1,630,389     1,078,200     5,115,060     4,090,586  
GROSS PROFIT     4,933,555     5,512,536     18,389,545     13,495,933  
                           
OPERATING EXPENSES:                          
    Research and development expense     (35,743 )   73,970     1,171,668     277,117  
    General and administrative expenses     1,195,094     662,065     2,650,579     1,994,560  
    Selling expenses     2,125,771     2,548,848     6,109,982     5,527,281  
    Depreciation and amortization     121,723     135,973     381,379     416,049  
      TOTAL OPERATING EXPENSES     3,406,845     3,420,856     10,313,608     8,215,007  
                           
INCOME FROM OPERATIONS     1,526,710     2,091,680     8,075,937     5,280,926  
                           
    OTHER INCOME (EXPENSE):                          
    Interest expense, net of interest income     (600,572 )   (1,246,920 )   (2,509,508 )   (4,068,200 )
    Gain on foreign currency transactions     (83,345 )                  
    Equity in loss of joint venture, net     (24,286 )   (19,688 )   (63,051 )   (67,677 )
    Subsidy income     (2,126 )   4,866     202,901     284,439  
      TOTAL OTHER EXPENSE     (710,329 )   (1,261,742 )   2,369,658     (3,851,438 )
                           
INCOME BEFORE INCOME TAXES     816,381     829,938     5,706,279     1,429,488  
                           
Income tax expense     146,005           1,499,201        
                           
NET INCOME     670,376     829,938     4,207,078     1,429,488  
                           
Net income attributed to non-controlling interest in subsidiaries     47,656     51,962     247,785     92,213  
INCOME ATTRIBUTABLE TO SHAREHOLDERS OF THE COMPANY     622,720     777,976     3,959,293     1,337,275  
                           
OTHER COMPREHENSIVE INCOME (LOSS):                          
    Foreign currency translation adjustment     572,478     14,766     (851,093 )   50,284  
                           
COMPREHENSIVE PROFIT     1,195,198     792,742     3,108,200     1,387,559  
                           
Other comprehensive income (loss) attributable to non-controlling interest     28,624     738     (42,555 )   2,514  
                           
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY   $ 1,166,574     792,004     3,150,755     1,385,045  
                           
EARNINGS PER SHARE                          
Basic   $ 0.01     0.01     0.05     0.02  
Diluted   $ 0.01     0.01     0.05     0.02  
WEIGHTED AVERAGE SHARES OUTSTANDING                          
Basic     75,670,953     67,638,657     72,863,479     60,907,137  
Diluted     75,749,890     67,676,783     72,942,416     60,951,616  
                           
                           

SOURCE: Aoxing Pharmaceutical Company, Inc.

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