China Medicine Corporation, a distributor of medical products, traditional pharmaceutical and Chinese medicines, herbs and dietary supplements, today announced financial results for the quarter ended September 30, 2007.
Revenue for the third quarter of 2007 increased 65.72% to $12.6 million compared to $7.6 million for the third quarter of 2006. Revenue from product sales for the third quarter 2007 was $11,904,525, an increase of $5,537,906, or 87%, from revenue of $6,366,619 for the third quarter of 2006. The company obtained exclusive regional distribution rights in China's Guangdong Province for 160 new products during the first nine months of 2007.
Net income for the three months ended September 30, 2007 was $2,205,914, a decrease of $71,465 from $2,277,379 for the comparable period in 2006. The decrease was due primarily to increases in selling, general and administrative expenses and research and development expenses.
"Our third quarter results were consistent with our internal expectations," explained Senshan Yang, CEO of China Medicine. "We sold more OTC drugs during this quarter, which lowered our profit margin. But this is just a temporary result. We expect our profit margins to improve through our efforts to increase the sales of high-margin products, proprietary products and medical formulas in accordance with our long-term sales strategy. Our administrative expenses were relatively high in the third quarter because we obtained exclusive distribution rights in Guangdong Province for over 160 products from the beginning of this year. Greater expenditures are typically needed for the marketing of such new products, and these expenses will be decreased once the sales network is set up."
"We are undertaking a search for a bi-lingual CFO and a qualified investor relations firm, so that we may better communicate with investors, integrate our financial system and enhance our internal control system,” Yang added.