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Tiens Biotech Group (USA) Reports First Quarter Results
Date:5/17/2010

NEW YORK, May 17 /PRNewswire-Asia/ -- Tiens Biotech Group (USA), Inc. (the "Company" or "Tiens", NYSE AMEX: TBV), http://www.tiens-bio.com , today announced financial results for the first quarter ended March 31, 2010.

Revenue for the first quarter of 2010 was $11.4 million, compared to $18.2 million for the first quarter of 2009.

Net income for the first quarter of 2010 was $3.6 million, or $0.05 per share, compared to $9.0 million, or $0.12 per share for 2009.

Revenue in China increased to $6.8 million for the first quarter of 2010, compared to $2.7 million for the same period in 2009. The Company's 2010 first quarter sales in China was, however, comparable to the 2009 average quarterly sales in China of $6.8 million. Management believes that Tianshi Engineering's announced plans to increase prices of its products during the third quarter of 2008 prompted customers to stock up on certain products in late 2008, thereby decreasing customer demand in the first quarter of 2009. Revenue in China for the first quarter of 2009 was lower than any other quarter in 2009.

Results for the first quarter of 2010 reflect a decrease in international revenue to $4.6 million, from $15.5 million for the same period in 2009 and was lower than the 2009 quarterly average revenue of $8.7 million. Management believes that uneven bulk ordering significantly contributed to the decrease as some international distributors purchase products only once or twice during each year. The decrease is also due to declined sales to Indonesia and Vietnam. In the first two quarters of 2009, customers in Indonesia and Vietnam significantly stocked up on the Company's products, which depressed subsequent sales in the latter half of 2009 and through the first quarter of 2010. Sales declines in these regions also reflect the recent adjustment by the Company's international distributors of the direct selling rules for customers in these regions, which is expected to increase long-term sales but negatively affect near-term sales.

Additionally, during 2008, China's Administration of Quality Supervision, Inspection and Quarantine ("AQSIQ") carried out a national campaign against unsafe food and substandard products, which brought on a general slow-down and backlog of export clearances for Chinese food products. Upon the lifting of the regulations, overseas affiliated companies began to purchase more products, thereby increasing sales in the first quarter of 2009.

Other Highlights

Cost of sales for the first quarter of 2010 were $3.4 million, compared to $5.7 million for the first quarter of 2009. This decrease was mainly due to the corresponding decrease in sales for the period. Cost of sales decreased at a higher rate than revenue, which is mainly attributable to the increased sales percentage of certain products, such as Cordyceps Capsules, which have a higher profit margin.

Gross profit for the first quarter of 2010 was $8.0 million, compared to $12.5 million for the first quarter of 2009. The gross profit margin for the first quarter of 2010 was 69.8%, compared to 68.6% for the first quarter of 2009.

Selling, general and administrative expenses were $3.5 million for the first quarter of 2010, compared to $3.1 million for first quarter of 2009. The increase was primarily due to increases in bad debts. Selling and administrative expenses as a percentage of sales was 30.7% for the first quarter of 2010, compared to 17.2% for the first quarter of 2009, primarily due to fixed costs which do not increase or decrease in line with sales.

As of March 31, 2010, Tiens had $129.6 million of retained earnings and total shareholders' equity of $179.3 million.

Jinyuan Li, Chairman, President and CEO of Tiens, said, "We are pleased to report an increase in domestic sales. We are confident that both international and domestic sales will return to, and potentially exceed, previous levels as customers and distributors begin to replenish stored up products. We remain committed to building greater market share in China, expanding our international customer base, and further implementing our strategic plans for long-term domestic and international growth."

About Tiens Biotech Group (USA), Inc. (http://www.tiens-bio.com )

Tiens Biotech Group (USA), Inc. (NYSE AMEX: TBV) conducts its business operations from Tianjin, People's Republic of China. Tiens primarily engages in the research, development, manufacturing, and marketing of nutrition supplement products, including wellness products and dietary supplements.

Tiens derives its revenues principally from product sales to affiliated companies in China and internationally in 54 countries. Since its establishment, Tiens has developed and produced 37 nutrition supplements, which include wellness products and dietary supplements. Tiens develops its products at its own product research and development center, which employs highly qualified professionals in the fields of pharmacology, biology, chemistry and fine chemistry. Tiens has obtained all required certificates and approvals from government regulatory agencies to manufacture and sell its products in China.

In China, Tiens conducts the marketing and sales of its products through its affiliated company, Tianshi Engineering. Tianshi Engineering markets and sells Tiens' products in China through chain stores, domestic affiliated companies, and its 92 branches. Outside of China, Tiens sells its products to affiliated companies in 54 countries who in turn sell through an extensive direct sales force, or multi-level marketing sales force. The Company's direct sales marketing program is subject to governmental regulation in each of these countries.

Certain statements in this press release constitute "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities and Exchange Act of 1934. Such forward- looking statements are not necessarily indicative of future financial results, and may involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements of the Company, to be materially different from any future results, performance, or achievements expressed or implied by such forward-looking statements. The Company's future operating results are dependent upon many factors, including but not limited to: (i) the Company's ability to obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) the Company's ability to build the management and human resources and infrastructure necessary to support the growth of its business; (iii) competitive factors and developments beyond the Company's control; (iv) whether the Company continues to experience delays in the export clearance of its products; (v) whether Tianshi Engineering, the Company's affiliate which sells its products in China, obtains a direct selling license in China; and (vi) other risk factors discussed in the Company's periodic filings with the Securities and Exchange Commission which are available for review at http://www.sec.gov under "Search for Company Filings."

    For further information, please contact:

    Tiens Biotech Group (USA), Inc.
     Investor Relations
     Tel:   +86-22-8213-7594
     Fax:   +86-22-8213-7594
     Email: investor@tiens-bio.com
     Web:   http://www.tiens-bio.com

    G. S. Schwartz & Co.
     Carl Hymans
     Tel:   +1-212-725-4500
     Fax:   +1-212-725-9188
     Email: carlh@schwartz.com



                 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

        CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
         FOR THE THREE MONTHS ENDED MARCH 31, 2010 and 2009 (UNAUDITED)

                                                   Three months ended March 31,
                                                         2010         2009
    REVENUE - RELATED PARTIES                        $11,403,363  $18,237,545

    COST OF SALES - RELATED PARTIES                    3,440,881    5,735,059

    GROSS PROFIT                                       7,962,482   12,502,486

    SELLING, GENERAL AND
     ADMINISTRATIVE EXPENSES                           3,497,547    3,130,936

    INCOME FROM OPERATIONS                             4,464,935    9,371,550

       Interest expense                                       --      (52,616)
        Interest income                                    1,872       85,768
        Other expense                                   (253,710)     (45,288)
    OTHER (EXPENSE) INCOME, NET                         (251,838)     (12,136)

    INCOME BEFORE INCOME TAXES                         4,213,097    9,359,414

    INCOME TAXES                                         609,502      359,615

    NET INCOME                                         3,603,595    8,999,799

    LESS: Net income attributable to the
     noncontrolling interest                            (342,057)    (406,974)

    NET INCOME ATTRIBUTABLE TO THE COMPANY             3,261,538    8,592,825

    OTHER COMPREHENSIVE INCOME:
         Foreign currency translation adjustment          14,970      200,003

    COMPREHENSIVE INCOME ATTRIBUTABLE
    TO THE COMPANY                                     3,276,508    8,792,828

    COMPREHENSIVE INCOME ATTRIBUTABLE
    TO THE NONCONTROLLING INTEREST                       343,398      419,595

    COMPREHENSIVE INCOME                              $3,619,906   $9,212,423

    EARNINGS PER SHARE,
    BASIC AND DILUTED                                      $0.05        $0.12

    WEIGHTED AVERAGE NUMBER OF SHARES,
    BASIC AND DILUTED                                 71,333,586   71,333,586



             TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
                       CONSOLIDATED BALANCE SHEETS
           AS OF MARCH 31, 2010 (UNAUDITED) AND DECEMBER 31, 2009

                                               March 31,        December 31,
                                                 2010              2009
                                              (Unaudited)
              ASSETS

    CURRENT ASSETS:
    Cash                                        $9,873,298        $1,848,328
    Accounts receivable, trade - related
     parties, net of allowance for
     doubtful accounts of $1,621,619 and
     $1,419,178 as of March 31, 2010 and
     December 31, 2009, respectively            10,245,625        15,379,312


    Inventories                                  5,024,331         5,328,052
    Other receivables                              902,216           995,657
    Other receivables - related parties         39,458,619        44,561,626
    Employee advances                              101,755           115,673
    Prepaid expenses                               594,263           658,193
    Prepaid taxes                                  171,715           407,534
    Total current assets                        66,371,822        69,294,375

    PROPERTY, PLANT AND EQUIPMENT, net           9,811,115        10,124,483

    OTHER ASSETS:
    Construction in progress                   133,225,733       125,572,621
    Construction deposits                        3,763,996         1,405,997
    Intangible assets, net                      12,789,812        12,864,295
    Other assets                                13,400,435        11,847,937
    Total other assets                         163,179,976       151,690,850

    Total assets                              $239,362,913      $231,109,708

             LIABILITIES AND SHAREHOLDERS' EQUITY

    CURRENT LIABILITIES:
    Accounts payable                            $4,211,661        $5,012,157
    Advances from customers - related
     parties                                     8,461,804         4,426,751
    Wages and benefits payable                   1,068,256         1,484,852
    Income taxes payable                           314,266                --
    Contractor deposits                            183,420           183,395
    Contractor payables                         18,834,263        18,513,216
    Other payables                               1,168,820         1,151,551
    Other payables - related parties             4,405,557         3,326,110
    Total current liabilities                   38,648,047        34,098,032

    NON-CURRENT LIABILITIES
    Deferred income                             11,238,037        11,236,501
    Total non current liabilities               11,238,037        11,236,501

    Total liabilities                           49,886,084        45,334,533

    EQUITY:
    Shareholders' equity of the Company:
    Common stock, $0.001 par value,
     250,000,000 shares authorized,
     71,333,586 issued and outstanding,
     respectively                                   71,334            71,334

    Paid-in-capital                             18,118,007        18,042,189
    Statutory reserves                          13,217,217        13,217,217
    Retained earnings                          129,631,801       126,370,263
    Accumulated other comprehensive
     income                                     18,277,093        18,262,123
    Total shareholders' equity of the
     Company                                   179,315,452       175,963,126
    Noncontrolling interest                     10,161,377         9,812,049
    Total equity                               189,476,829       185,775,175
    Total liabilities and equity              $239,362,913      $231,109,708



                 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

                      CONSOLIDATED STATEMENTS OF CASH FLOWS
          FOR THE THREE MONTHS ENDED MARCH 31, 2010 AND 2009 (UNAUDITED)

                                                  Three months ended March 31,
                                                         2010        2009
    CASH FLOWS FROM OPERATING
     ACTIVITIES:
           Net income                                 $3,603,595   $8,999,799
           Adjustments to reconcile net
            income to cash
            provided by (used in) operating
             activities:
             Provision for doubtful accounts             202,247     (184,568)
             Depreciation                                417,469      544,811
             Amortization                                 83,557       97,143
             Interest expense                                 --        1,372
             Gain on sale of assets                      (15,082)     (11,652)
             Rental expense  borne by a related party     81,749       81,626
           (Increase) decrease in assets:
             Accounts receivable, trade - related
              parties                                  4,933,543   (1,493,130)
             Other receivables                            93,577      (17,415)
             Other receivables - related parties      (1,200,159)  (2,567,169)
             Inventories                                 304,560    1,398,175
             Employee advances                            13,935      (76,407)
             Prepaid expense                              64,017     (589,907)
            Increase (decrease) in liabilities:
             Accounts payable                           (819,926)    (567,056)
             Advances from customers - related
              parties                                  4,034,448    1,364,661
             Wages and benefits payable                 (416,798)    (393,303)
             Other taxes payable                         550,140     (270,424)
             Other payables                               19,487     (565,726)
             Other payables - related parties          1,079,414      106,916
              Net cash provided by
               operating activities                   13,029,773    5,857,746

    CASH FLOWS FROM INVESTING ACTIVITIES:
           Investment in Life Resources                3,000,000           --
           Proceeds from disposal of a subsidiary        700,000           --
           Construction deposits                        (562,642)  (1,163,628)
           Contractor deposits                                --       48,930
           Addition to construction in progress       (9,112,590)  (4,483,010)
           Equipment deposits                         (1,558,192)          --
           Proceeds from sales of properties           2,621,021       17,031
           Purchase of equipment and automobiles         (88,505)  (1,035,910)
              Net cash used in investing activities   (5,000,908)  (6,616,587)

    CASH FLOWS FROM FINANCING ACTIVITIES:
              Net cash provided by (used in)
               financing activities                           --           --

    EFFECT OF EXCHANGE RATE CHANGES ON CASH               (3,895)      55,752

    NET INCREASE (DECREASE) IN CASH                    8,024,970     (703,089)

    CASH, beginning of period                          1,848,328   44,854,511

    CASH, end of period                               $9,873,298  $44,151,422

    Supplemental disclosures of cash flow information
      Cash paid during the period for:
        Interest                                      $       --  $   266,273
        Income taxes                                  $  213,625  $ 3,877,420



              TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
                           REVENUE BY REGION

                                             Three months ended
                                                  March 31,
                                               2010         2009      Change

    China                                    $6,783,273   $2,742,620  147.3%
    International                            $4,620,090  $15,494,925  -70.2%
    Total                                   $11,403,363  $18,237,545  -37.5%


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SOURCE Tiens Biotech Group (USA), Inc.
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