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Tiens Biotech Group (USA) Reports 2010 Results
Date:3/31/2011

TIANJIN, China March 31, 2011 /PRNewswire-Asia/ -- Tiens Biotech Group (USA), Inc. (the "Company" or "Tiens", NYSE AMEX: TBV), a company dedicated to the research, development, manufacturing, and marketing of nutrition supplement products, including wellness products and dietary supplements, today announced financial results for the year ended December 31, 2010.

For 2010, revenue was $41.3 million, compared to $62.0 million for 2009.  

Net income for 2010 was $4.8 million, or $0.07 per share, compared to $23.8 million, or $0.33 per share for 2009.

Results for 2010 mainly reflect a decrease in international sales.  For 2010, international revenue was $16.4 million, compared to $34.7 million for 2009.  In 2008, China's Administration of Quality Supervision, Inspection and Quarantine 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 for 2009.

In addition, Tiens' Indonesia affiliated company has not purchased from the Company during the year of 2010, given they purchased more products in 2009 after the 2008 product scarcity for the reason noted above. In addition, local Original Equipment Manufacturers in Indonesia have been producing healthcare products with the Company's semi-finished goods, which have a profit margin that is much lower than the profit margin of finished goods.

Tiens' affiliated companies in many regions have made certain adjustments to their marketing programs and reorganizations at their branch and higher levels, which are expected to boost sales performance over the long-run, but negatively affect short-term sales.

Other Highlights  

Cost of sales were $15.0 million in 2010 compared to $20.2 million in 2009, a decrease of 25.6%.  This decrease was primarily due to the corresponding decrease in sales. Cost of sales decreased at a lower rate than revenue, primarily due to fixed costs, which do not increase or decrease in line with sales.

Gross profit decreased by 37.0% to $26.3 million in 2010, compared to $41.8 million in 2009. The gross profit margin for 2010 was 63.7% compared to 67.5% in 2009.

Selling, general and administrative expenses increased by 22.0% to $19.5 million in 2010, compared to $16.0 million in 2009. The increase was primarily due to increases in allowance for bad debt ($1.9 million), salaries expenses ($0.7 million) and research & development expenses ($0.6 million).

As of December 31, 2010, Tiens had $128.0 million of retained earnings and total shareholders' equity of $285.5 million.

In addition, Tiens reported that on March 11, 2011, Tianjin Tianshi Biological Engineering Co., Ltd. (Tianshi Engineering) was awarded a direct selling license in Tianjin.

Jinyuan Li, Chairman, President and CEO of Tiens, said, "We remain confident that domestic sales will return to, and potentially exceed, previous levels, as distributors begin to replenish their stock of our products.  In addition, we maintain this same positive sentiment regarding international sales, which we expect will benefit from the removal of export restrictions and gradual economic improvement.  We are steadfast in our commitment 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. 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 45 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 87 branches.  Outside of China, Tiens sells its products to affiliated companies in 45 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; and (v) 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.

-Tables Follow-TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME FOR THE YEARS ENDED DECEMBER 31, 2010 and 2009 20102009REVENUE - RELATED PARTIES

$

41,021,135

$

60,032,968REVENUE - THIRD PARTIES323,5851,943,101COST OF SALES - RELATED PARTIES14,850,73918,754,680COST OF SALES - THIRD PARTIES158,6381,412,812GROSS PROFIT26,335,34341,808,577SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES19,530,50116,009,382INCOME FROM OPERATIONS6,804,84225,799,195   Interest expense(230,905)(186,543)   Interest income18,362301,709   Other expense35,965(176,757)OTHER EXPENSE, NET(176,578)(61,591)INCOME BEFORE INCOME TAXES 6,628,26425,737,604INCOME TAXES1,469,548930,703NET INCOME5,158,71624,806,901LESS: Net income attributable to the noncontrolling interest(323,101)(965,557)NET INCOME ATTRIBUTABLE TO THE COMPANY4,835,61523,841,344OTHER COMPREHENSIVE INCOME:Foreign currency translation adjustment5,131,503441,140Loss from the realization of foreign currency sale-(6,030,079)COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY9,967,11818,252,405COMPREHENSIVE INCOME ATTRIBUTABLETO THE NONCONTROLLING INTEREST664,854993,504COMPREHENSIVE INCOME

$

10,631,972

$

19,245,909EARNINGS PER SHARE, BASIC AND DILUTED

$

0.07

$

0.33WEIGHTED AVERAGE NUMBER OF SHARES, BASIC AND DILUTED71,333,58671,333,586The accompanying notes are an integral part of this statement.TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIESCONSOLIDATED BALANCE SHEETSAS OF DECEMBER 31, 2010 AND DECEMBER 31, 2009December 31,December 31,20102009A S S E T SCURRENT ASSETS:Cash

$

10,155,522

$

1,848,328Accounts receivable, trade - related parties, net of allowance for doubtful accounts of $3,869,617 and $1,419,178 as of December 31, 2010 and December 31, 2009 , respectively10,012,86115,379,312Inventories5,703,3495,328,052Other receivables1,045,952995,657Other receivables - related parties17,376,52244,561,626Employee advances170,842115,673Prepaid expenses, net415,208658,193Prepaid taxes3,646,140407,534Total current assets48,526,39669,294,375PROPERTY, PLANT AND EQUIPMENT, net72,037,54210,124,483OTHER ASSETS:Construction in progress128,715,283125,572,621Construction deposits12,490,8551,405,997Intangible assets, net12,987,00012,864,295Other assets10,721,04011,847,937Total other assets164,914,178151,690,850Total assets

$

285,478,116

$

231,109,708L I A B I L I T I E S
A N D
S H A R E H O L D E R S'   E Q U I T YCURRENT LIABILITIES:Accounts payable

$

14,120,791

$

5,012,157Advances from customers - related parties8,688,8774,426,751Wages and benefits payable1,613,7821,484,852Short-term debt3,024,800-Income taxes payable490,782-Contractor deposits209,376183,395Contractor payables28,134,71118,513,216Other payables 1,113,4161,151,551Other payables - related parties1,417,5163,326,110Total current liabilities58,814,05134,098,032NON-CURRENT LIABILITIESLong term debt18,451,280-Deferred income11,473,85311,236,501Total non current liabilities29,925,13311,236,501Total liabilities88,739,18445,334,533Commitments and ContingenciesEQUITY:Shareholders' equity of the Company:Common stock, $0.001 par value, 250,000,000 shares authorized, 71,333,586 issued and outstanding, respectively71,33471,334Paid-in-capital18,349,90818,042,189Statutory reserves16,465,14413,217,217Retained earnings127,957,951126,370,263Accumulated other comprehensive income 23,393,62618,262,123Total shareholders' equity of the Company186,237,963175,963,126Noncontrolling interest10,500,9699,812,049Total equity196,738,932185,775,175Total liabilities and equity

$

285,478,116

$

231,109,708The accompanying notes are an integral part of this statement.TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWSFOR THE YEARS ENDED DECEMBER 31, 2010 AND 200920102009CASH FLOWS FROM OPERATING ACTIVITIES:Net income

$

5,158,716

$

24,806,901Adjustments to reconcile net income to cash provided by (used in) operating activities:Deferred income(142,070)-Provision for doubtful accounts2,349,703406,795Increase (decrease) provision for obsolete inventory(237,632)309,343Depreciation2,036,2802,173,251Amortization338,019381,742Interest expense167,5864,761(Gain) loss on sale of assets(63,773)47,054Loss on assets written off 40,9825,876Rental expense borne by a related party330,708326,774(Increase) decrease in assets:Accounts receivable, trade - related parties3,411,8778,308,993Other receivables(16,036)(184,540)Other receivables - related parties 9,936,0381,668,812Inventories93,3152,761,335Employee advances(50,112)(38,359)Prepaid expense 258,945(419,419)Increase (decrease) in liabilities:Accounts payable8,742,972(1,249,152)Advances from customers - related parties21,603,6641,178,463Wages and benefits payable76,914(43,279)Other taxes payable(2,674,295)968,294Other payables(74,068)(650,296)Other payables - related parties 9,069,8533,107,699Net cash provided by operating activities60,357,58643,871,048CASH FLOWS FROM INVESTING ACTIVITIES:Cash outflow arising from disposal of a subsidiary-(23,975,473)Collections from loans to local government -105,229Construction deposits(11,248,302)(2,664,741)Contractor deposits19,30619,734Addition to construction in progress(54,487,459)(42,734,161)Equipment deposits(6,102,039)(11,782,984)Proceeds from sales of properties73,65029,131Purchase of equipment and automobiles(1,441,906)(2,009,536)Net cash used in investing activities(73,186,750)(83,012,801)CASH FLOWS FROM FINANCING ACTIVITIES:Loan from (repayment to) related parties-(3,946,860)Proceed from short term debt2,958,800-Proceeds from long term debt18,048,680-Net cash provided by (used in) financing activities21,007,480(3,946,860)EFFECT OF EXCHANGE RATE CHANGES ON CASH128,87882,430INCREASE (DECREASE) IN CASH8,307,194(43,006,183)CASH, beginning of period1,848,32844,854,511CASH, end of period

$

10,155,522

$

1,848,328Supplemental disclosures of cash flow informationCash paid during the period for:Interest

$

217,154

$

105,817Income taxes

$

1,489,417

$

3,287,531The accompanying notes are an integral part of this statement.TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES REVENUE BY REGIONTwelve months endedDecember 31,20102009

ChangeChina  

$24,894,472

$27,241,333 - 8.6%International

$
,450,248

$
34,734,736-52.6%Total

$41,344,720

$61,976,069  -33.3%CONTACT:Investor Relations

Debra BerlinerTiens Biotech Group (USA), Inc.

G. S. Schwartz & Co.Tel:   +86-22-8213-7335

Tel:  212-725-4500Fax:  +86-22-8213-7914

Fax: 212-725-9188Email: investor@tiens-bio.com

Email: dberliner@schwartz.com http://www.tiens-bio.com
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SOURCE Tiens Biotech Group (USA), Inc.
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