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.
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: firstname.lastname@example.org Web: http://www.tiens-bio.com G. S. Schwartz & Co. Carl Hymans Tel: +1-212-725-4500 Fax: +1-212-725-9188 Email: email@example.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%
|SOURCE Tiens Biotech Group (USA), Inc.|
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