China Sky One Medical, Inc., one of the leading producers and distributors for external-Chinese medicine in China, has announced second quarter 2006 financial results.

Financial highlights from the second quarter of 2006 versus the second quarter of 2005 include:

    -- Revenues increased 237% to $5.1 million in 2Q06 from $1.5 million in
       2Q05.
    -- Net income increased 266% to $1.5 million in 2Q06 from $0.4 million in
       2Q05.
    -- Gross profit grew 242% to $3.9 million in 2Q06 from $1.2 million in
       2Q05
    -- Income from operations increased 264% to $1.8 million from $0.5 million
       in 2Q05

''It is our commitment to build a recognizable brand name,'' stated Liu Yan-Qing, Chief Executive Officer and President of China Sky One Medical, "We continue to make high quality products and strive to introduce revolutionary medicine consumers will benefit from.''

Quarter Ended June 30, 2006

Revenue for the second quarter increased 237% to $5.1 million in 2Q06 from $1.5 million in the second quarter of 2005. The Company has maintained its net profit margin since the founding of the company. This is mainly attributable to an increase in sales associated with the introduction of numerous new products and an implementation of a new sales program, increases in domestic distribution centers, enhancements in relationship with a major national retailer, increases in worldwide exports and continued reduction in the relative impact of customer discount programs.

The Cost of sales increased by $295,558, and the cost of sales as a percentage of sales was 24% in both the three months ended June 30, 2006 and the first quarter ended March 31, 2006. This increase in cost of sales is directly tied to the growth of revenues. The Company maintained a 76% profit margin for both three month periods ended March 31, 2006 and June 30, 2006.

Finance costs decreased slightly to $9,286 in the second quarter, compared to$9,699 in the first quarter in 2006, due primarily to a reduction in TDR's short-term borrowings. Interest expenses of $9,286 in the second quarter of 2006 are associated with bank loans of $375,267.

The Company has a relatively low level of debt as compared to its total equity, and believes it has done a good job demonstrating that it is able to borrow effectively to sustain the Company. The Company's cash flow from operations has been sufficient to meet interest obligations. When trends are generally positive and the Company has a low level of debt relative to equity and its coverage ratios are good, managers carefully evaluate how debt might be used to leverage higher profits in the future.

Six Months Ended June 30, 2006

For the Six months ended June 30, 2006, revenue increased 148% to $9.1 million from $3.7 million in the first six months 2005. Gross profit increased 165% to $7.0 million from $2.6 million in the first half of 2005, and net income enhanced 146% to $2.5 million from $1.0 million in the first half of 2005.

Cost of sales declined to 23% of net sales in the six months ended June 30, 2006 compared to 28% in the six months ended June 30, 2005. The decrease is attributable to a shift in product mix to higher margin products and lower material costs due in significant part to improved manufacturing efficiencies resulting from higher volumes and longer production runs. Total cost of sales increased to $2.2 million for the six months ended June 30, 2006 as compared to $1.1 million in 2005. This increase is tied to the growth in revenues.

Source:佚名