China BCT Pharmacy Group, Inc. reported consolidated unaudited earnings results for the first quarter ended March 31, 2012. For the quarter, revenue increased 21.6% to $71.2 million from $58.6 million in the first quarter of 2011. The increase in revenue was primarily due to an $11.7 million increase in sales to hospitals as a result of a wider range of products sold, benefiting from increased coverage by the national insurance plan. With separate distribution agreements with seven government-owned hospitals, the company also managed to increase its share of purchases from these large customers. Operating income increased 40.6% to $12.1 million, or 17.1% of revenue, from $8.6 million, or 14.7% of revenue, in the first quarter of 2011. GAAP net income applicable to common stock increased 32.0% to $7.7 million, or $0.20 per diluted share, as compared to $5.9 million, or $0.15 per diluted share, in the first quarter of 2011. Non -GAAP adjusted net income was $7.9 million, or $0.21 per diluted share, compared to non-GAAP adjusted net income of $6.2 million, or $0.16 per diluted share in the first quarter of 2011. The company generated $0.8 million in cash flow from operating activities for the three months ended March 31, 2012, compared to cash flow generated by operating activities of $18.8 million in the prior year, primarily due to an increase in accounts receivable due to a slowdown in payments from customers. Additions to property, plant and equipment was $1.2 million against $0.01 for the same period a year ago. Income before income taxes was $12.0 million against $8.7 million for the same period a year ago. For the year 2012, the company expects double digit revenue growth driven by the ability to develop and leverage new wholesale contracts at the supplier and hospital levels, the expansion of the in-store TCM counseling service concept at the retail stores and greater output from the manufacturing operation. The company plans to add 4 to 5 drug stores with built-in TCM clinics for each larger city and at least one such store for each county in Guangxi Province. The company re-opened first retail pharmacy store with a built-in TCM clinic in December 2011, the second one in March 2012 and the company expects to open another 3 to 4 such stores in April 2012. The company expects 20 to 30 store program that will cost an estimated $12 million by the end of 2012.