China Pharmaceuticals first-quarter total revenue rises 50% to $7.05M

China Pharmaceuticals, Inc. (OTCBB: CFMID) ("China Pharmaceuticals, Inc." or the "Company"), one of China's leading manufacturers and distributors of prescription and over-the-counter pharmaceuticals, today announced record sales for its first quarter ended March 31, 2010. The Company's quarterly report on Form 10-Q was filed on May 17, 2010 with the United States Securities and Exchange Commission.

“We are focused on continuing to expand our portfolio of high margin products that address major disease categories and on continuing to build sustainable growth in revenues and profits.”

"We are delighted to report a strong first quarter of 2010, with revenues significantly exceeding our expectations. We continue to believe that the factors that contributed to this performance were strong sales from our new products and the successful restructuring of our sales and marketing network. We recorded $7,053,199 in total revenue for the quarter ended March 31, 2010, a strong 50% increase compared to the same quarter in 2009. At the same time, we also reduced our current liabilities by 61%. We are confident that our strong cash position combined with no long-term debt and significantly reduced current liabilities will provide us with significant flexibility to continue to maintain our current growth trajectory and to pursue continued organic growth at an accelerated pace," stated Mr. Guozhu Wang, Chairman and Chief Executive Officer of China Pharmaceuticals, Inc. "We are focused on continuing to expand our portfolio of high margin products that address major disease categories and on continuing to build sustainable growth in revenues and profits."

First Quarter 2010 Highlights versus quarter ended March 31, 2010:

• Total revenue for the quarter increased 50% year-over-year to $7,053,199
• Gross profit increased 53% to $4,233,021
• Working Capital rose 19% to $11,006,657
• Total Liabilities decreased 61%, Long-term Debt remains at Nil
• Shareholders' Equity grew 5.3% to $30,154,106

Sales and Operations

Total revenue for the quarter ended March 31, 2010 increased 50% to $7,053,199 from $4,693,433 for the quarter ended March 31, 2009. Gross profit rose 53% to $4,233,021, as compared to $2,764,139 for the same quarter in 2009. Gross profit margin increased to 60%, compared to 59% for the previous period. Operating income decreased by 3% to $2,118,935 from $2,189,154 for the quarter ended March 31, 2009, due to an increase in selling and general administrative expenses that were a factor in driving the increase in sales for the period. Net income also decreased by 14% to $1,547,876, as compared to $1,802,769 for the quarter ended March 31, 2009.

Financial Condition

As of March 31, 2010, the Company had $5,518,587in cash as compared to $6,685,630, at the end of December 31, 2009, a decrease of 17%. Cash flow from operating activities decreased by 23% to $1,341,061 which was primarily due to increased selling and general administrative expenses reducing net income. Working capital improved to $11,006,657, an increase of 19% from $9,243,121 as of December 31, 2009, primarily due to repayment of short-term bank loans and a 31% reduction in accounts payable, both of which ultimately contributed to a 61% decrease in total current liabilities. Long-term debt remains at Nil. Shareholders' equity as of March 31, 2010 was $30,154,106 as compared to $28,624,514 at the end of December 31, 2009, representing a 5.3% increase.

Outlook for 2010

"Fiscal 2010 is expected to be a transitional year for China Pharmaceuticals, Inc. as we prepare for the introduction of new drugs and pursue additional opportunities for both organic growth and potential strategic acquisitions. Our current outlook reflects only the drugs that we have in hand today and will be subject to update as we execute strategic initiatives to expand our market position and profitability in the future. We remain very confident regarding our future growth prospects and look forward to sharing further details with our shareholders as our expansion plans reach a definitive stage," concluded Mr. Guozhu Wang.

SOURCE China Pharmaceuticals, Inc.