Tongli Pharmaceuticals Announces Strong Revenue and Net Income Growth in Third Quarter of Fiscal Year 2009


NEW YORK, N.Y., Feb. 17, 2009 (GLOBE NEWSWIRE) -- Tongli Pharmaceuticals (OTCBB:TGLP), a pharmaceutical company specializing in the development, manufacture, and commercialization in the People's Republic of China of a wide range of prescription and over the counter ("OTC") pharmaceutical products based on principles of traditional Chinese medicine, today announced financial results for the third quarter ended December 31, 2008.

Financial Results

Revenue in the third quarter of fiscal year 2009 increased 290% year over year to $1.75 million from $0.45 million, and revenues in the nine months ended December 31, 2008 increased 314% year over year to $5.07 million from $1.22 million, reflecting greater demand for Tongli products and increased penetration into new markets.

Gross profit in the third quarter of fiscal year 2009 was $0.83 million, up from $0.27 million in the same period of the prior year. Gross margin was approximately 47.4%, compared to 59.7% in the same period of the prior year, mainly due to a mix shift as well as increasing raw material costs. Gross profit in the nine months ended December 31, 2008 was $2.24 million, up from $0.60 million in the prior year. Gross margin was approximately 44.3% for the nine months, compared to 48.8% in the same period of the prior year.

For the third quarter of fiscal year 2009, operating expenses were $0.32 million or 18.3% of revenue, compared to $0.13 million or 28.5% of revenue in the comparable period of the prior year. For the nine months ended December 31, 2008, operating expenses were $0.76 million or 15.0% of sales, compared to $0.36 million or 29.3% of sales in the comparable period of the prior year. The increase in operating expenses on an absolute dollar basis was primarily due to the increase in salaries resulting from additional personnel needed to support our growth and increased advertising expenses. Operating income increased 264% to $0.51 million from $0.14 million in the third quarter of fiscal 2009 and increased 523% to $1.49 million in the nine months ended December 31, 2008, as compared to $0.24 million in the same period in fiscal year 2008.

Net income for the third quarter of fiscal year 2009 increased 164% to $0.54 million or $0.05 per diluted share, compared to $0.20 million or $0.02 per diluted share, in the same period of the prior year. Net income for the nine months ended December 31, 2008 increased 505% to $1.53 million, or $0.15 per diluted share, compared to $0.25 million or $0.03 per diluted share, in the same period of the prior year.

Mr. Mingli Yao, founder and CEO of Tongli, commented: "We are continuing to grow rapidly in spite of challenging market conditions. During this reporting period we have filled key management positions, most notably hiring a new CFO with broad financial experience in the United States. Consumers continue to purchase our products, and we are actively looking for additional new products to add to our distribution pipeline."

About Tongli Pharmaceuticals

Tongli Pharmaceuticals (USA), Inc., through its subsidiary, Harbin Tianmu Pharmaceutical Co., Ltd., manufactures and markets pharmaceutical and healthcare products in the People's Republic of China. The company, formerly known as American Tony Pharmaceutical, Inc., is based in New York, New York.

Safe Harbor Statement

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. The economic, competitive, governmental, technological and other factors identified in the Company's filings with the Securities and Exchange Commission, including the Form 10-Q for the quarter ended December 31, 2008, 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.



                  TONGLI PHARMACEUTICALS (USA), INC.

                      CONSOLIDATED BALANCE SHEETS

                              (UNAUDITED)

                                              DECEMBER 31,   MARCH 31,
                                                  2008         2008
                                              -----------  -----------
                                              (Unaudited)
                    ASSETS
 CURRENT ASSETS:
   Cash                                       $    45,928  $   130,630
   Trade accounts receivable, net                 140,445        2,470
   Inventories                                     58,254       11,172
   Prepaid expenses                                38,429           --
   Refundable deposits                                 --      405,643
   Advances to suppliers                        1,263,863      678,654
                                              -----------  -----------
     TOTAL CURRENT ASSETS                       1,546,919    1,228,569

 PROPERTY AND EQUIPMENT, NET                    7,142,316    7,813,779

 CONTRACT DEPOSIT                               1,025,650           --
                                              -----------  -----------

 TOTAL ASSETS                                 $ 9,714,885  $ 9,042,348
                                              ===========  ===========

      LIABILITIES AND SHAREHOLDERS' EQUITY
 CURRENT LIABILITIES:
   Note payable - bank                        $ 1,009,349  $   995,168
   Accounts payable                               104,201      959,382
   Due to related parties                         987,493      819,620
   Accrued expenses and other sundry current
    liabilities                                   262,009       90,893
                                              -----------  -----------
      TOTAL CURRENT LIABILITIES                 2,363,052    2,865,063
                                              -----------  -----------

 COMMITMENTS AND CONTINGENCIES

 SHAREHOLDERS' EQUITY:
   Preferred stock, $0.001 par value,
   Authorized 1,000,000 shares; none issued            --           --
   Common stock, $0.001 par value, Authorized
    200,000,000 shares Issued and
    outstanding - 10,033,216 shares and
    9,963,216, respectively                        10,033        9,963
   Additional paid-in capital                   6,585,093    7,092,663
   Accumulated other comprehensive income       1,110,112      955,288
   Accumulated deficit                           (353,405)  (1,880,629)
                                              -----------  -----------
  TOTAL SHAREHOLDERS EQUITY                     7,351,833    6,177,285
                                              -----------  -----------

 TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY   $ 9,714,885  $ 9,042,348
                                              ===========  ===========



                   TONGLI PHARMACEUTICALS (USA), INC.

  CONSOLIDATED STATEMENTS OF OPERATIONS AND OTHER COMPREHENSIVE INCOME

                               (UNAUDITED)

                       FOR THE THREE MONTHS      FOR THE NINE MONTHS
                         ENDED DECEMBER 31,       ENDED DECEMBER 31,
                      -----------------------  -----------------------
                         2008        2007         2008        2007
                      ----------- -----------  ----------- -----------

 REVENUE              $ 1,754,581 $   449,660  $ 5,065,291 $ 1,223,234

 COST OF SALES,
  including
  depreciation and
  amortization of
  $37,909, $9,348,
  $123,810 and
  $37,117,
  respectively           923,525      181,423    2,820,484     626,147
                      ----------- -----------  ----------- -----------

 GROSS PROFIT            831,056      268,237    2,244,807     597,087
                      ----------- -----------  ----------- -----------

 OPERATING EXPENSES
  General and
   administrative         148,536      57,675      453,132     135,423
  Research and
   development             16,978          --       27,153          --
  Depreciation expense     49,896      68,407      135,051     206,611
  Selling expense         106,285       2,180      142,473      16,406
                      ----------- -----------  ----------- -----------
    TOTAL OPERATING
     EXPENSES             321,695     128,262      757,809     358,440
                      ----------- -----------  ----------- -----------

 OPERATING INCOME         509,361     139,975    1,486,998     238,647

 OTHER EXPENSE
  (INCOME)
   Interest expense        44,079      29,798      130,996      78,805
   Rental income          (69,922)    (92,510)    (171,222)    (92,510)
                      ----------- -----------  ----------- -----------

 NET INCOME               535,204     202,687    1,527,224     252,352

 OTHER COMPREHENSIVE
  INCOME
   Foreign currency
    translation
    adjustment                943     160,205      154,824     305,108
                      ----------- -----------  ----------- -----------

 COMPREHENSIVE INCOME $   536,147 $   362,892  $ 1,682,048 $   557,460
                      =========== ===========  =========== ===========


 BASIC AND DILUTED
  INCOME PER SHARE    $      0.05 $      0.02  $      0.15 $      0.03
                      =========== ===========  =========== ===========

 BASIC AND DILUTED
  WEIGHTED AVERAGE
  SHARES OUTSTANDING   10,033,216   9,963,216   10,033,216   9,963,216
                      =========== ===========  =========== ===========


            

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