China Medicine first quarter revenues surge 4.7 per cent

China Medicine has announced a net income of $1.79m for the first quarter of 2010.

China Medicine, a manufacturer, distributor and developer of Western pharmaceuticals, traditional Chinese medicines (TCM) and other nutraceuticals, has reported revenues of $10.5m for the first quarter ended March 31, 2010, an increase of 4.7 per cent, compared to $10m for the comparable period in 2009.

China Medicine has posted a net income of $1.79m for the first quarter of 2010, compared to $0.55m, for the prior year period. Income from operations was $1.24m, compared to $1.76m for the year ago period.

China Medicine expects full year 2010 revenues in the range of $72 to $76m, or 11 per cent to 17 per cent growth, and gross margin in the range of 33 per cent to 38 per cent, as compared to 29.3 per cent in 2009. The company anticipates full year operating expenses to represent approximately 10 per cent of revenues, as compared to 18 per cent reported in the first quarter 2010.

Senshan Yang, chairman and CEO of China Medicine, said: "We saw robust gross margin expansion of over 300 basis points in the first quarter as a result of increased focus on the distribution of higher margin products and increased sales of proprietary products, including those from LifeTech.

"Distribution product gross margin rose nearly 200 basis points as a result of increased focus on exclusive distribution products. Gross margin of proprietary products and medical technology rose to 45.3 per cent from 33.3 per cent with the inclusion of LifeTech products.

"While our earnings in the quarter were adversely impacted higher expenses from additional personnel and amortization and depreciation associated with the LifeTech acquisition. We expect the further integration of LifeTech into our operations and continue gross margin expansion to outpace our spending level and drive significant earnings growth in the coming quarters."