HARBIN, China, April 22 /PRNewswire-Asia/ -- Renhuang Pharmaceuticals, Inc. (Pink Sheets: RHGP) ("Renhuang" or the "Company"), a developer, manufacturer and distributor of botanical products, bio-pharmaceuticals and traditional Chinese medicines ("TCM"), today announced that the Company has significantly reduced its Days Sales Outstanding ("DSO"), resulting in improved cash flow from operations and healthier working capital.
For fiscal year 2009, Renhuang reported Days Sales Outstanding of 185 days. At the end of first quarter of 2010, through a variety of management initiatives, the Company effectively reduced its DSO to 117 days. Renhuang's management expects to further lower the DSO period to 100 days by the second quarter, an improvement of over 15% compared with the first quarter and over 46% compared with fiscal year 2009. Management anticipates continued improvement in Days Sales Outstanding in the coming quarters.
The Company's growing sales have contributed to the improvement in DSO. In the past, Renhuang extended special credit terms to its sales agents in order to promote sales. These favorable terms often included lengthy payment periods, resulting in longer Days Sales Outstanding. With the Company's improved position within the pharmaceuticals industry, it is no longer necessary for Renhuang to extend such favorable credit terms and current arrangements have significantly compressed payment periods.
"We continue to focus on strengthening our balance sheet and financial condition, more importantly our accounts receivables. The effective reduction in our DSO, reflects Renhuang's ability to manage risk and demonstrates improvement in our sales management," commented Mr. Shaoming Li, the Chairman and CEO of Renhuang. "We are confident the improvement in DSO will positively impact our operating cash flow and working capital."
ABOUT RENHUANG PHARMACEUTICALS, INC.
Renhuang Pharmaceuticals, Inc. is engaged in the research, development, manufacturing, and distribution of botanical products, bio-pharmaceutical products, and traditional Chinese medicines ("TCM"), in the People's Republic of China. All of the Company's products are produced at its three GMP-certified production facilities in Ah City, Dongfanghong and Qingyang. The Company distributes its botanical anti-depression and nerve-regulation products, biopharmaceutical products, and botanical antibiotic and OTC TCMs through its network of over 3,000 distributors and over 70 sales centers across 24 provinces in China. For more information, visit http://www.renhuang.com .
Safe Harbor Statement
This press release contains certain statements that may include forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are based upon management's beliefs, assumptions and expectations of the Company's future operations and economic performance, taking into account the information currently available to management. These statements are not statements of historical fact. Forward-looking statements involve risks and uncertainties, some of which are not currently known that may cause actual results, performance or financial condition to be materially different from the expectations of future results, performance or financial condition expressed or implied in any forward-looking statements. These forward-looking statements are based on current plans and expectations and are subject to a number of uncertainties including, but not limited to, the Company's ability to achieve its financial guidance, ability to continue to improve its days sales outstanding, ability to list its shares on a senior stock exchange, ability to manage expansion of its operations effectively, competition in the marketing and sales of its products, and other factors detailed in the Company's annual report on Form 10-K and other filings with the Securities and Exchange Commission. The Company undertakes no obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You are cautioned not to unduly rely on such forward-looking statements when evaluating the information presented herein.
For more information, please contact:
Renhuang Pharmaceuticals, Inc.
Ms. Portia Tan, IR Contact
Tel: +86-451-5392-5461
Email: ir@renhuang.com
CCG Investor Relations:
Ms. Lei Huang, Account Manager
Phone: +1-646-833-3417 (New York)
Email: lei.huang@ccgir.com
Website: www.ccgirasia.com
Mr. Crocker Coulson, President
Phone: +1-646-213-1915 (New York)
Email: crocker.coulson@ccgir.com
