JERSEY CITY, N.J., Nov. 14, 2012 /PRNewswire/ -- Aoxing Pharmaceutical Company, Inc. (NYSE MKT: AXN) ("Aoxing Pharma"), a specialty pharmaceutical company focusing on research, development, manufacturing, and distribution of narcotic, pain-management, and addiction treatment pharmaceuticals, today announced its financial and operational results for the quarter ended September 30, 2012. Complete financial results can be found in the Quarterly Report on Form 10-Q filed by Aoxing Pharma on November 14, 2012.
Sales for the first quarter of fiscal year 2013 were $2,604,764, representing a 70% increase over the sales realized during the first quarter of the 2012 fiscal year. The increase was primarily attributable to the 78% increase in sales of the Company's main product, Zhongtongan, which is now being marketed for gynecological and orthopaedic applications in addition to its core dental market. Sales of Zhongtongan accounted for 92% of sales during the quarter ended September 30, 2012.
Gross margin for the first quarter of fiscal 2013 was 61.1%, an increase from the gross margin of 56.7% achieved in the first quarter of fiscal 2012. The increase was primarily the result of a strategic decision to reduce emphasis on sale of lower margin products. As a result of increased sales and improved margin, Aoxing Pharma's gross profit for the first quarter of fiscal 2013 increased by 83% to $1,590,519.
General and administrative expenses in the three months ended September 30, 2012 were $610,871, a reduction of 18% from the first quarter of the prior fiscal year. The reduction in expenses was primarily attributable to a 26% reduction in stock compensation expenses, a reduction in staffing, and overall efforts to contain costs. The reduction in general and administrative expenses was more than offset, however, by a 68% increase in selling expenses, as the Company seeks to expand its market position. As a result, total operating expenses increased by 10% from quarter to quarter.
Primarily due to improvement in sales, Aoxing Pharma recorded a net loss of $448,516 for the first quarter of fiscal 2013, an improvement from the net loss of $955,163 recorded in the first quarter of fiscal 2012.
On September 30, 2012, Aoxing Pharma had $6.2 million in cash on hand and a working capital deficit of $2,109,492, which represented a significant improvement over its working capital deficit of $9,112,842 at June 30, 2012. The improvement occurred because, on August 14, 2012, Aoxing Pharma entered into a refinancing agreement with Beijing International Trust Co., Ltd., and replaced a short-term loan of approximately $3.96 million owed to China CITIC Bank with a two-year term loan of approximately $7.12 million.
Zhenjiang Yue, our Chairman and CEO, commented, "The Chinese pharmaceutical market continues to be challenging. I am pleased with Aoxing Pharma's operating results, highlighted by continued growth in product sales."
About Aoxing Pharmaceutical Company, Inc.
Aoxing Pharmaceutical Company, Inc. is a US incorporated specialty pharmaceutical company with its operations in China, specializing in research, development, manufacturing and distribution of a variety of narcotics and pain-management products. Headquartered in Shijiazhuang City, outside Beijing, Aoxing has the largest and most advanced manufacturing facility in China for highly regulated narcotic medicines. Its facility is one of the few GMP facilities licensed for the manufacture of narcotic medicines by the China State Food and Drug Administration (SFDA). It has a joint venture collaboration with Johnson Matthey Plc to produce and market narcotics and neurological drugs in China. For more information, please visit: www.aoxingpharma.com.
Safe Harbor Statement from Aoxing Pharmaceutical Company, Inc.
Certain statements made in this press release are forward-looking and are made pursuant to the safe harbor provisions of the Securities Litigation Reform Act of 1995. Such statements involve risks and uncertainties that may cause actual results to differ materially from those set forth in these statements. All forward-looking statements included herein are based upon information available to the Company as of the date hereof and, except as is expressly required by the federal securities laws, the Company undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, changed circumstances or future events or for any other reason. To the extent that any statements made here are not historical, these statements are essentially forward-looking. The Company uses words and phrases such as "guidance," "forecasted," "projects," "is expected," "remain confident," "will" and/or similar expressions to identify forward-looking statements in this press release. Undue reliance should not be placed on forward-looking information. The economic, competitive, governmental, technological and other risk factors identified in the Company's filings with the Securities and Exchange Commission, specifically, Item 1A, "Risk Factors," in the Form 10-K for the year ended June 30, 2012, may cause actual results or events to differ materially from those described in the forward looking statements in this press release. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether because of new information, future events, or otherwise.
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SOURCE Aoxing Pharmaceutical Company, Inc.