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The forward-looking statements contained in this presentation are made only for this date and TPI is under no obligation to revise or update those forward-looking statements.The third quarter fiscal year 2012 ended March 31, 2012 financial highlights. Revenue delivered $14.4 million, compared with $24.9 million in third quarter fiscal year 2011. Operating income delivered $1.3 million compared to $5 million a year earlier. Net income was $0.9 million compared with $4.1 million a year earlier. Earnings were $0.03 per basic and diluted share in the third quarter of fiscal 2012 compared with $0.14 per basic or diluted share in the third quarter of fiscal 2011. Cash and cash equivalents totaled $29.9 million on March 31st, 2012, operating cash flow for the nine months and in March 31st, 2012 was $4.8 million compared with $12.2 million, in nine month ended March 31st, 2011. Sales for the quarter were $13.4 million, a decrease of 40.6% as compared to $24.0 million a year earlier. The decrease was mainly due to generic pricing pressure and competitive market conditions to restrictive government policies to prioritized the central drug list, EDR drug sales were simultaneously reduced a negative impact of sales and margins, with higher margin generic pharmaceuticals. Third, (inaudible) was negatively effect of sales in this period and for during the prior period, a rise in demand as a result of inventory accumulation by our downstream customers prior to the enforcement of healthcare reform policies last year. Our top five products sales are Ginkgo Mihuan Oral Liquid GMOL, $2.6; Apu Shuangxin APU, $0.9 million and Azithromycin AZI, $0.52 million; Xue Lian Chong Cao XLCC, $0.65 million and Qingre Jiedu Oral Liquid, $0.4 million. The use of products totaled $5.1 million in sales representing 35% of the total revenue. For the remainder of fiscal 2012, we expect that our generic portfolio analysis distribution revenue to continue with flat to slightly rising growth as a result of the current pricing restrictions from a healthcare reform policy presently in place.
Our Jiangchuan macrolide JCM facility production capacity is expected to ramp up after the remainder of fiscal 2012, after an initial readjustment of the production effeminacy during third quarter of fiscal 2012. We project JCM sales for the fourth quarter of fiscal 2012 to reach approximately 30% of capacity or 10 tons per month. We further expect that JCM to gradually increase capacity to 80%, approximately 200 tones earning capacity by the end of 2012.Gross margin for the quarter ended March 31st, was 33.5% as compared to 43.6% a year earlier. Our organic product portfolio delivered 41.1% gross margin or 10.2% lower than our 51.4% with the respect to prior period. As a result of the mix, the lower margin distribution revenue and gross margin reduction under the current pricing environment and we expect that our overall gross margin in the near term, on a quarterly comparison basis, trend lower but on a sequential basis, they stabilize depending upon sort of revenue mix of our distribution and JCM revenue as compared to the proprietary portfolio performance. Net income was (inaudible) for the quarter ended March 31st, 2012 as compared to net income $4.1 million that includes 0.35, $350,000 non-cash gain due to the chain in fair value warrants for the quarter ended March 31st, 2011, a net decrease of $2.8 million. This is direct result of the sale decrease along with the gross margin compression. Diluted earnings per share for the quarter was $0.03 based on 29.2 million shares, compared with the earnings of $0.14 per diluted share for the quarter ended March 31st, 2011 based on 29.8 million shares. Read the rest of this transcript for free on seekingalpha.com