China Medicine Corporation, a leading manufacturer, developer and distributor of Western pharmaceuticals, traditional Chinese medicines (TCM), and other health products, has announced that its revenue has increased 14.2 percent to $17.2 million for the second quarter ended June 30, 2010 from $15.1 million in the prior year period.
The company noted that its gross margin was 35.5 percent, compared to 23.4percent in the prior year period and operating income increased 113.0 percent to $3.8 million from $1.8 million in the prior year period. Net income available to common shareholders increased to $4.1 million, or $0.10 per diluted share, from $41,996, or $0.00 per diluted share, in the prior year period.
Mr. Senshan Yang, chairman and CEO of China Medicine Corporation, stated, "We are very happy with our performance this quarter, which marked a successful period of transition for us as we move from a pure pharmaceutical distributor to a vertically-integrated pharmaceutical enterprise. We are especially pleased with the improvement in gross margin, which was mainly driven by a product mix shift within our distribution business and the revenue contribution from our LifeTech proprietary products. Additionally, our addressable market in China continues to grow, and our efforts to capitalize on this growth are progressing very well. We believe that we are well-positioned to be a leading consolidator in this fragmented industry and we'll strive to work responsibly and aggressively on behalf of our shareholders."
In the second quarter of 2010, revenue increased 14.2 percent year over year to $17.2 million from $15.1 million, reflecting a combination of continued strong demand for our existing products and contributions from the newly-acquired Guangzhou LifeTech Pharmaceutical (LifeTech).
Revenue from distribution increased 4.1 percent to $15.2 million from $14.6 million in the prior year period, driven by increased sales of high-margin products mainly for the treatment of cardiovascular and cerebral-vascular diseases. Revenue from proprietary products increased to $2.0 million from $0.5 million in the prior year period, reflecting the inclusion of revenues from LifeTech's products, which were acquired at the end of 2009.
Gross profit increased 73.1 percent to $6.1 million from $3.5 million in the prior year period. Gross margin increased to 35.5 percent from 23.4 percent in the prior year period, primarily due to a revenue mix shift toward higher-margin products. The shift was aided by the product mix shift within our distribution business and increased revenue contribution from LifeTech products.