Tiens Biotech Group (USA) Reports Fourth Quarter and Twelve-Mon...(ments. During2007 the Company phased out...)

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Cost of sales for the fourth quarter of 2007 was $4.5 million, compared to $4.4 million for the fourth quarter of 2006. Cost of sales for the twelve months ended December 31, 2007 was $16.5 million, compared to $18.1 million for the same period in 2006. This decrease was primarily due to the corresponding decrease in sales revenue. Cost of sales decreased at a lesser rate than revenue because the cost of raw materials increased during 2007 while the Company's product prices remained unchanged.

Gross profit for the fourth quarter of 2007 was $8.8 million compared to $12.2 million for the fourth quarter of 2006. The gross profit margin for the fourth quarter of 2007 was 65.9%, compared to 73.7% for the same period in 2006. Gross profit for the twelve months ended December 31, 2007 was $38.4 million, compared to $48.7 million for the same period in 2006. The gross profit margin for the twelve months ended December 31, 2007 was 69.9%, compared to 72.9% for the same period in 2006. These decreases reflect the reductions in revenue for the fourth quarter and twelve months of 2007 and gross profit margins being lower for semi-finished products than for the finished products that the Company was selling in 2006.

Selling, general and administrative expenses were $4.0 million for the fourth quarter of 2007, compared to $4.1 million for the fourth quarter of 2006. The selling and administrative expense as a percentage of sales was 29.7% for the fourth quarter of 2007 compared to 25.0% for the fourth quarter of 2006. Selling, general and administrative expenses were $14.3 million for the twelve months ended December 31, 2007, compared to $12.8 million for the comparable period in 2006.

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