The forward-looking statements contained in this presentation are made only for this date and TPI’s under no obligation to revise or update these forward-looking statements.Now, I’d like to invite Dr. Jiang to speak to the audience. Jiang Guoqing [Foreign Language – Chinese]. James Jiayuan Tong Second quarter fiscal year 2011 ending December 31st, 2010, financial highlight. Revenue increased 69.6% year-over-year to $25.3 million, from $14.9 million in second quarter fiscal year 2010. Operating income increased 69% year-over-year to $5.3 million from $3.2 million in second quarter of fiscal year 2010 with the operating margins at 21%, respectively. Net income was $4.4 million, up 69.2% year-over-year from $2.6 million in second quarter fiscal year 2010 with net margins improved to 17.4% from 17.2% in second quarter fiscal year 2010. Earnings per share of $0.16 per basic share or $0.14 per diluted share, up from $0.10 per basic share or $0.08 per diluted share a year earlier, a gain of 52.5% and 70.9%, respectively. Cash and cash equivalents total $31.2 million on December 31st, 2010 or $1.11 per basic share in cash. Sichuan Jiangchuan macrolide facility construction is completed. For the sales, sales for the quarter ended December 31st, 2010 was $25.3 million, up 69.6% as compared to $14.9 million for the quarter ended December 31st, 2009. The China expansion and market penetration continued to be the major drivers for the revenue growth. Our current hospital coverage reached 880 hospitals, up from 850 hospitals from the beginning of fiscal year 2011. Revenues from the top selling products are listed as follows; Ginkgo Mihuan, $5.4 million; Apu Shuangxin, $1.8 million; Azithromycin Tablet, $1 million; Xuelian Chongcao, $1.1 million; Qingre Jiedu, $0.8 million. These products total $10.1 million in sales, representing 40% of the quarterly revenue. Cost of sales for the quarter ended December 31st, 2010 or $14 million or 55.3% of the sales as compared to $7.2 million or 48.3% of sales in the quarter ended December 31st, 2009.
Gross margins for the quarter ended December 31st, 2010, was 44.7%, compared to 51.9% for the quarter ended December 31st, 2009. The gross margins were attributable to the addition of the revenues from Tianyin Medicine Trading, TMT, the distribution arm of TPI, in the current year. TMT related gross margins average approximately 15%. While in this quarter, our organic portfolio delivered approximately 55% gross margins, an increase of 3% over the 52% gross margins recognized for the quarter ended December 31st, 2009.Operating Expenses for the quarter ended December 31st, 2010, were $6 million, compared with $4.6 million a year earlier. The increase was due to continuing sales expansion-related sales payroll and marketing expenses and the remaining cost of $0.5 million financial cost on the previous restricted stock compensation. Net Income was $4.4 million for the quarter ended December 31st, 2010, as compared to net income of $2.6 million for the quarter ended December 31st, 2009, a net increase of $1.8 million or 69.2% year-over-year. Net profit margins rose to 17.4% from 17.2% for the quarter ended December 31st, 2009, as the leverage in the TPI’s business operation further drives the revenue while keeping the operating expenses in-line with the sales expansion. Diluted earnings per share for the three months ended December 30, 2010 were $0.14, up 70.9% from the earnings of $0.08 per diluted share for the three months ended December 31st, 2009, based on 30.5 million shares and 30.4 million shares, respectively. Read the rest of this transcript for free on seekingalpha.com