NEW YORK, May 15 /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, 2009.
Revenue for the first quarter of 2009 increased 42% to $18.2 million, compared to $12.8 million for the first quarter of 2008, reflecting a significant increase in international sales.
Net income attributable to the Company for the quarter rose 138.1% to $8.6 million, or $0.12 per share, compared to net income of $3.6 million, or $0.05 per share, for the 2008 first quarter.
For the first quarter of 2009, international revenue increased to $15.5 million, or 130.7% over $6.7 million for the same period in 2008, mainly due to greater sales in Indonesia and Vietnam. Additionally, export restrictions have been reduced since China's Administration of Quality Supervision, Inspection and Quarantine ended in late 2008 its national campaign against unsafe food and substandard products, which began in August 2007.
For the first quarter of 2009, revenue in China was $2.7 million, a 55.1% decrease from $6.1 million for the same period in 2008. This decrease of domestic revenue was due to the decrease of orders for wellness products, which management believes was due to customers stocking up on certain products during the third quarter of 2008 as a result of the price increase announcement by, Tianjin Tianshi Biological Engineering Co., Ltd. ("Tianshi Engineering") the affiliated company which markets and sells Tiens' products in China, during that quarter.
Cost of sales for the first quarter of 2009 increased to $5.7 million, an increase of 42% compared to $4.0 million for the same period in 2008. Cost of sales for the period increased at a slightly lower rate than revenue, primarily due to fixed costs, which do not increase or decrease in line with revenue changes.
Gross profit for the first quarter of 2009 was $12.5 million, an increase of 42.4% compared to $8.8 million for the same period in 2008. This increase reflects the slightly lower rate of increase of cost of sales compared with that of revenue.
Selling, general and administrative expenses were $3.1 million for the first quarter of 2009, a decrease of 3.6% compared to $3.2 million for the same period in 2008. The decrease was primarily due to decreases in salary expenses as a result of salary reductions and reduced headcount and business tax expenses. The selling and administrative expenses as a percentage of sales declined to 17.2% in the 2009 first quarter from 25.3% for the same period in 2008.
In China, Tiens sells its products to Tianshi Engineering. To qualify for a direct selling license in China, Tianshi Engineering is required to produce a part of the products that it sells in China. As a result, in 2006, Tiens began to sell semi-finished products to Tianshi Engineering, which jointly shares licenses with Tiens to produce, manufacture and sell the products. The semi-finished products, which Tiens is now exclusively selling in China, have lower sales prices than the finished products Tiens had previously sold to Tianshi Engineering. The application of Tianshi Engineering for a direct selling license in China is still pending.
Tiens continues to strive to expand its market share in China through the branches, chain stores, and Chinese affiliated companies of Tianshi Engineering. To enhance its position in this competitive market, Tianshi Engineering continues to increase its marketing activities in China, including opening additional branches across China, developing a nation-wide advertising campaign, encouraging media coverage and strengthening the Tiens brand.
As of March 31, 2009, Tiens had $114.9 million of retained earnings and total shareholders' equity of $157.8 million.
Jinyuan Li, Chairman, President and CEO of Tiens, said, "We are pleased to report positive results which include significant increases in total revenue, net income and international revenue, and are confident that international sales will continue to be strong. As the decline in sales in China reflects customers buying in greater volume prior to a price increase, we are optimistic that domestic sales will return to, and potentially exceed, previous levels as customers begin to replenish stored up products. Tiens remains committed to gaining greater market share in China, continuing to expand our growing international customer base, and further implementing our strategic plans for long term 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 46 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, Tianjin Tianshi Biological Engineering Co., Ltd. ("Tianshi Engineering"). Tianshi Engineering markets and sells Tiens' products in China through chain stores, domestic affiliated companies, and its 98 branches. Outside of China, Tiens sells its products to affiliated companies that 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."
-Tables Follow- TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED) Three months ended March 31, 2009 2008 REVENUE - RELATED PARTIES $18,237,545 $12,820,821 COST OF SALES - RELATED PARTIES 5,735,059 4,040,060 GROSS PROFIT 12,502,486 8,780,761 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 3,130,936 3,247,199 INCOME FROM OPERATIONS 9,371,550 5,533,562 (Interest expense) (52,616) (52,584) Interest income 85,768 237,332 Other (expense) income (45,288) 259,423 OTHER (EXPENSE) INCOME, NET (12,136) 444,171 INCOME BEFORE INCOME TAXES 9,359,414 5,977,733 INCOME TAXES 359,615 1,480,394 NET INCOME 8,999,799 4,497,339 LESS: Net Income attributable to noncontrolling interest (406,974) (888,437) NET INCOME ATTRIBUTABLE TO THE COMPANY 8,592,825 3,608,902 OTHER COMPREHENSIVE INCOME: Foreign currency translation adjustment 200,003 4,423,860 COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY 8,792,828 8,032,762 COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NONCONTROLLING INTEREST 419,595 1,163,584 COMPREHENSIVE INCOME $9,212,423 $9,196,346 EARNINGS PER SHARE, BASIC AND DILUTED $0.12 $0.05 WEIGHTED AVERAGE NUMBER OF SHARES 71,333,586 71,333,586 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2008 AND DECEMBER 31, 2008 March 31, December 31, 2009 2008 (Unaudited) ASSETS CURRENT ASSETS: Cash $20,293,635 $20,992,573 Cash related to assets held for sale 23,857,787 23,861,938 Total cash 44,151,422 44,854,511 Accounts receivable, trade - related parties, net of allowance for doubtful accounts of $925,565 and $1,108,789 as of March 31, 2009 and December 31, 2008, respectively 25,648,895 23,941,431 Inventories 6,985,983 8,365,607 Other receivables 830,579 813,591 Other receivables - related parties 18,360,639 15,729,076 Employee advances 189,686 112,591 Prepaid expenses 892,240 301,898 Prepaid taxes 1,727,363 1,531,207 Assets held for sale 10,930,860 10,904,842 Total current assets 109,717,667 106,554,754 PROPERTY, PLANT AND EQUIPMENT, net 10,719,838 10,274,643 OTHER ASSETS: Construction in progress 77,345,874 72,300,104 Construction deposits 3,517,428 2,586,302 Intangible assets, net 13,077,072 13,137,195 Other assets 80,345 87,541 Total other assets 94,020,719 88,111,142 Total assets $214,458,224 $204,940,539 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF MARCH 31, 2009 AND DECEMBER 31, 2008 LIABILITIES AND SHARE HOLDERS' EQUITY March 31, December 31, 2009 2008 (Unaudited) CURRENT LIABILITIES: Accounts payable $5,724,468 $6,283,849 Advances from customers - related parties 4,608,494 3,239,650 Wages and benefits payable 1,110,191 1,449,146 Other taxes payable -- 117,818 Contractor deposits 212,386 163,248 Contractor payables 12,261,342 11,871,456 Other payables 1,370,326 1,933,743 Other payables - related parties 6,367,301 6,373,900 Current portion of long term debt, related party 2,130,000 2,130,000 Liabilities directly associated with assets classified as held for sale 117,380 122,047 Total current liabilities 33,901,888 33,684,857 NON-CURRENT LIABILITIES Long term debt, net of current portion, related party 2,137,742 2,137,742 Deferred income 11,222,672 11,208,844 Total non current liabilities 13,360,414 13,346,586 Total liabilities 47,262,302 47,031,443 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 9,302,605 9,234,123 Statutory reserves 9,420,783 9,420,783 Retained earnings 114,918,181 106,325,356 Accumulated other comprehensive income 24,051,065 23,851,062 Total shareholders' equity of the Company 157,763,968 148,902,658 Noncontrolling interest 9,431,954 9,006,438 Total equity 167,195,922 157,909,096 Total liabilities and equity $214,458,224 $204,940,539 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED MARCH 31, 2009 AND 2008 (UNAUDITED) Three months ended March 31, 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $8,999,799 $4,497,339 Adjustments to reconcile net income to cash provided by (used in) operating activities: Provision for doubtful accounts (184,568) (12,288) Depreciation 544,811 683,155 Amortization 97,143 60,894 Interest income 1,372 (53,159) Gain on sale of assets (11,652) (8,431) (Increase) decrease in assets: Accounts receivable, trade - related parties (1,493,130) (3,914,933) Accounts receivable, trade - third parties -- 106,413 Other receivables (17,415) 255,386 Other receivables - related parties (2,567,169) (198,638) Inventories 1,398,175 (441,968) Employee advances (76,407) (48,871) Prepaid expense (589,907) 112,341 Increase (decrease) in liabilities: Accounts payable (567,056) (169,891) Advances from customers - related parties 1,364,661 1,102 Wages and benefits payable (393,303) (200,580) Other taxes payable (270,424) 649,299 Other payables (565,726) 158,270 Other payables - related parties 106,916 125,300 Net cash provided by operating activities 5,776,120 1,600,740 CASH FLOWS FROM INVESTING ACTIVITIES: Repayment of loan from related parties -- 1,403,831 Construction deposits (1,163,628) 96,237 Contractor deposits 48,930 (284,016) Addition to construction in progress (4,483,010) (4,257,203) Proceeds from sales of properties 17,031 -- Purchase of equipment and automobiles (1,035,910) (123,344) Net cash used in investing activities (6,616,587) (3,164,495) CASH FLOWS FROM FINANCING ACTIVITIES: Loan from related parties -- 3,489,184 Increase in paid in capital 81,626 -- Net cash provided by financing activities 81,626 3,489,184 EFFECT OF EXCHANGE RATE CHANGES ON CASH 55,752 2,153,552 INCREASE (DECREASE) IN CASH (703,089) 4,078,981 CASH, beginning of period 44,854,511 54,081,848 CASH, end of period $44,151,422 $58,160,829 Supplemental disclosures of cash flow information Cash paid during the period for: Interest -- -- Income taxes $447,440 $455,480 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES REVENUE BY REGION Three months ended March 31, 2009 2008 Change China $2,742,620 $6,105,779 -55.1% International $15,494,925 $6,715,042 130.7% Total $18,237,545 $12,820,821 42.2% For more information, please contact: Investor Relations Tiens Biotech Group (USA), Inc. Tel: +86-22-8213-3491 Fax: +86-22-8213-7914 Email: firstname.lastname@example.org Carl Hymans G. S. Schwartz & Co. Tel: +1-212-725-4500 Fax: +1-212-725-9188 Email: email@example.com Web: http://www.tiens-bio.com
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