Aoxing Pharmaceutical Company, Inc. Announces Financial Results for
Third Quarter of 2014 Fiscal Year
JERSEY CITY, NJ--(Marketwired - May 14, 2014) - Aoxing
Pharmaceutical Company, Inc. (NYSEMKT: 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 the three and
nine month periods ended March 31, 2014. Complete financial
results can be found in the Quarterly Report on Form 10-Q filed by
Aoxing Pharma on May 14, 2014.
Financial Results:
Revenues for the three and nine months ended March 31, 2014 were
$2,445,793 and $9,489,708, respectively, representing a 30% and a
22% increase over the revenues realized in the comparable periods
of fiscal year 2013. The increase in revenue was mainly
attributable to the increase in sales of our main product,
Zhongtongan, which is now being marketed for gynecological and
orthopaedic applications in addition to its core pediatric and
stomotological market. Sales of Zhongtongan accounted for 91%
of sales during the quarter ended March 31, 2014.
Cost of sales for the three and nine months ended March 31, 2014
were $1,425,630 and $5,464,000, respectively, representing a 101%
and a 78% increase over the cost of sales recorded in the
comparable periods of fiscal year 2013. The increase in cost
of sales resulted from a poor harvest at the end of 2013, which
dramatically increased raw material prices. As a result of the
increase in raw material prices, Aoxing Pharma's gross profits for
the three and nine months ended March 31, 2014 fell by 20.7% and
18.3% from the comparable periods of fiscal 2013.
Despite the reduction in gross profit, Aoxing Pharma reduced its
loss from operations during the three and nine month periods ended
March 31, 2014. Loss from operations of $717,874 during the three
months ended March 31, 2014 was only 31% of the loss from
operations realized in the prior year's third quarter, and loss
from operations of $2,625,798 during the nine months ended March
31, 2014 was only 58% of the loss from operations realized in the
comparable period of fiscal 2013. The primary reason for the
reduction in loss from operations was the elimination of a
television advertising program carried out during fiscal 2013, with
resulting reductions in selling expense of $2,103,722 and
$1,541,806 during the three and nine month periods ending March 31,
2014.
Net interest expense increased by 71% to $3,524,563 for the nine
months ended March 31, 2014, as the Company's short and long term
debt increased by $9,142,080 from March 31, 2013 to March 31,
2014. After that deduction, the Company realized a net loss
attributable to the shareholders of Aoxing Pharma of $1,822,137 and
$5,882,840 for the three and nine months ended March 31, 2014,
respectively, representing improvements of 30% and 2% compared to
the same periods of fiscal 2013.
On March 31, 2014, Aoxing Pharma had $2.4 million in cash on
hand and a working capital deficit of $23,911,146, which
represented a deterioration of $14,099,835 from Aoxing Pharma's
working capital position at June 30, 2013. The primary reasons
for the increase in our working capital deficit were the net loss,
which was funded by an increase in short-term bank loans, and the
reclassification of $10.1 million in bank debt from long-term to
current liabilities.
Zhenjiang Yue, our Chairman and CEO, commented, "The Chinese
pharmaceutical market continues to be challenging. I am pleased
with Aoxing Pharma's operating results, highlighted by continued
growth in product sales, as well as by the faith that our lenders
have shown in our business model, as they continue to fund the
growth and development of our Company."
About Aoxing Pharmaceutical Company, Inc. 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 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 State Food and Drug Administration (SFDA). Aoxing Pharma
has a joint venture collaboration with Johnson Matthey Plc to
produce and market narcotics and neurological drugs in China. For
more information, please visit: www.aoxingpharma.com.
Safe Harbor Statement from Aoxing Pharmaceutical Company, Inc.
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, 2013, 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.
CONTACT: Aoxing Pharmaceutical Company: 646-367-1747
investor.relations@aoxingpharma.com
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