HARBIN, China, Dec. 28, 2011 /PRNewswire-Asia-FirstCall/ --
Weikang Bio-technology Group, Inc.
(the "Company," "Weikang" or WKBT.PK) today announced that the
Company has completed moving all of its management departments into
the building it purchased last quarter for $14 million. Located at No.365 Chengde Street in the Daowai District of
Harbin, the hub of northeast
China, Weikang previously rented
two floors of the building.
Mr. Yin Wang, the Chairman and
CEO of Weikang commented, "We are very glad that finally we have
our own headquarters building, which can accommodate all of our
departments, instead of having to rent different places for
different departments."
On a conference call on December 15,
2011, Mr. Wang explained to investors about the WKBT HQ
building and its purchase. "The building has ten floors with 7,000
square meters (approximately 70,000 square feet) and I believe it
will improve our management efficiency. Although the $14 million price tag of the building is a big
number, it already came down from its peak asking price by its
previous owner, which is a local credit union. We believe it is
necessary to include this building at this moment as part of our
business expansion plan for the next few years."
Mr. Wang also answered some additional investor questions
regarding WKBT's third quarter financial statements from the list
below:
Question:
Why did Net Sales increase 11% from the prior year yet Accounts
Receivable increased 10 times from $650,000 to $6.5
million?
Answer:
"The market for our products has been affected by the slowing
down of the economy in China in
the recent months. To cope with that, we extended credit terms to
some large customers from 30 days to 60 days. As result, the AR
increased to $6.5 million, the
collection of which has been very good with no delays. Despite the
increase in AR, percentage-wise, the amount is still under
control," said Chairman Wang.
Question:
Advances to Suppliers and Other Receivable increased more than
20 times from $241,000 to
$5.2 million. Please explain.
Answer:
"The raw material price has been increased significantly during
the last few months affected by the inflation of the whole economy
in China. We believed the prices
of raw materials would continue to increase. Therefore, we entered
a large contract with a large supplier to lock down the price of
raw material, for which we paid about $5
million as a down payment. We believe this is
necessary to control the cost," Mr Wang said.
Question:
Income before tax was $8.4 million
last year, but only $3.5 million this
year. Yet, the income tax expense increased despite an almost 60%
decline in taxable income. Please explain.
Answer:
"This is because there was about $4.3
million in one-time, non-cash expenses in the G&A
Expenses in the last quarter, which resulted from stock issuance to
some consultants and a consulting firm, which we believe are
necessary and critical for our long term business development. So
the income before tax was $3.5
million down from $8.4 million
but since the non-cash expenses was not deductible from the taxable
income for tax purposes, the income tax expense still increased
along with our revenue increase," clarified Mr. Wang.
About Weikang Bio-Technology Group Co., Inc.
Weikang Bio-Technology Group Co., Inc. is principally engaged in
developing, manufacturing and distributing Traditional Chinese
Medicine (TCM), and health and nutritional supplements in
China, in compliance with
requisite Chinese licenses and approvals. The Company is also
expanding its business scope to develop, manufacture and distribute
Chinese herbal extract products and GMP certified western
prescription and OTC pharmaceuticals through its acquisition of
Tianfang Pharmaceutical Co., Ltd. For more information, please
visit http://www.weikangbio.com.
Contact:
Yue Kang (Venus):
+86 4-518-835-5530
+86 15846588061
Email: weikangbio@yahoo.com
Safe Harbor Statement
Certain statements in this press release constitute
forward-looking statements for purposes of the safe harbor
provisions under The Private Securities Litigation Reform Act of
1995. These forward-looking statements are often identified
by the use of forward-looking terminology such as "believes,"
"expects" or similar expressions, involve known and unknown risks
and uncertainties. Although the Company believes that the
expectations reflected in these forward-looking statements are
reasonable, they do involve assumptions, risks and uncertainties,
and these expectations may prove to be incorrect. You should not
place undue reliance on these forward-looking statements, which
speak only as of the date of this press release. The Company's
actual results could differ materially from those anticipated in
these forward-looking statements as a result of a variety of
factors, including those discussed in the Company's periodic
reports that are filed with the Securities and Exchange Commission
and available on its website (http://www.sec.gov). All
forward-looking statements attributable to the Company or persons
acting on its behalf are expressly qualified in their entirety by
these factors. Other than as required under the securities laws,
the Company does not assume a duty to update these forward-looking
statements.
SOURCE Weikang Bio-Technology Group Co., Inc.