NEW YORK, Aug. 14 /PRNewswire-Asia-FirstCall/ -- Tiens Biotech Group (USA), Inc. (the "Company" or "Tiens"; NYSE Amex: TBV), http://www.tiens-bio.com , today announced financial results for the second quarter and six months ended June 30, 2009.
Revenue for the second quarter of 2009 increased 4.6% to $20.6 million, compared to $19.7 million for the second quarter of 2008, reflecting an increase in sales in China.
Net income for the quarter rose 83% to $10.3 million, or $0.14 per share, compared to net income of $5.6 million, or $0.07 per share, for the 2008 second quarter.
For the second quarter of 2009, international revenue was $10.9 million, compared to $11.1 million for the same period in 2008. The decrease in international revenue was mainly due to a decrease in sales in the Europe-Asia region by $2.9 million in the second quarter of 2009, as compared to the second quarter of 2008. International sales continues to benefit from export restrictions having been reduced since China's Administration of Quality Supervision, Inspection and Quarantine completed in late 2008 its national campaign against unsafe food and substandard products, which adversely affected the Company's international sales in the first half of 2008.
For the second quarter of 2009, revenue in China was $9.7 million, an increase of 13.6% compared to $8.5 million for the same period in 2008. This increase in domestic revenue was due to increased marketing efforts in China.
For the six months ended June 30, 2009, revenue was $38.8 million, an increase of 19.4% compared to $32.5 million for the same period in 2008. The increase in revenue for the first six months of 2009 was primarily driven by an 1,373,096 Amortization 194,380 140,911 Interest expense (income) 2,710 (92,523) Gain on sale of assets (15,717) (8,554) (Increase) decrease in assets: Accounts receivable, trade - related parties (5,532,449) (15,693,689) Accounts receivable, trade - third parties -- 22,722 Other receivables 10,743 498,556 Other receivables - related parties (992,241) (526,327) Inventories 3,355,993 190,894 Employee advances (80,805) (185,415) Prepaid expense (435,576) 365,778 Increase (decrease) in liabilities: Accounts payable (1,579,065) 1,223,358 Advances from customers - related parties (219,470) 663,444 Wages and benefits payable (703,898) (422,254) Other taxes payable 8,920 1,205,680 Other payables (395,970) (67,118) Other payables - related parties (202,847) 16,388 Net cash provided by (used in) operating activities 13,645,862 (1,119,756) CASH FLOWS FROM INVESTING ACTIVITIES: Collection from loans to local government 105,193 450,197 Repayment of loan from related parties -- 2,133,222 Construction deposits (3,846,961) (2,206,145) Contractor deposits 158,551 101,801 Addition to construction in progress (15,954,182) (9,722,463) Proceeds from sales of properties 17,039 61,152 Purchase of equipment and automobiles (921,388) (360,192) Net cash used in investing activities (20,441,748) (9,542,428) CASH FLOWS FROM FINANCING ACTIVITIES: Loan from (repayment to) related parties (3,945,510) 7,400,000 Payments on long term debt, related party -- (1,065,000) Proceeds for joint venture investor in Dongfeng -- 2,828 Payments to minority interest shareholder -- (5,070,091) Increase in paid in capital 163,331 -- Net cash provided by (used in) financing activities (3,782,179) 1,267,737 EFFECT OF EXCHANGE RATE CHANGES ON CASH 64,084 3,053,932 DECREASE IN CASH (10,513,981) (6,340,515) CASH, beginning of period 44,854,511 54,081,848 CASH, end of period $34,340,530 $47,741,333 Supplemental disclosures of cash flow information Cash paid during the period for: Interest $105,817 $132,662 Income taxes $667,347 $1,822,619 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES REVENUE BY REGION Three months ended June 30, 2009 2008 Change China $9,669,603 $8,509,932 13.6% International $10,881,433 $11,144,515 -2.4% Total $20,551,036 $19,654,447 4.6% Six months ended June 30, 2009 2008 Change China $12,412,223 $14,615,711 -15.1% International $26,376,358 $17,859,557 47.7% Total $38,788,581 $32,475,268 19.4% For more information, please contact: Investor Relations Tiens Biotech Group (USA), Inc. Tel: +86-22-8213-3491 Fax: +86-22-8213-7914 Email: email@example.com Carl Hymans G. S. Schwartz & Co. Tel: +1-212-725-4500 Fax: +1-212-725-9188 Email: firstname.lastname@example.org increase of 47.7% in international sales.
Net income for the six months ended June 30, 2009 was $19.3 million, an increase of 90.5% compared to $10.1 million for the same period in 2008. This increase reflects the increase in sales and the transfer of production and sale of semi-finished products from the Company's subsidiary, Tianjin Tianshi Biological Development Co., Ltd., to its other subsidiary, Tianjin Tiens Life Resources Co., Ltd., which has an exemption from PRC income taxes.
Cost of sales for the second quarter of 2009 decreased to $6.1 million, or by 1.4%, compared to $6.2 million for the same period in 2008. This decrease was mainly due to the decrease in the cost of some materials, such as capsules.
Gross profit for the second quarter of 2009 was $14.4 million, an increase of 7.3% compared to $13.5 million for the same period in 2008. The gross profit margin for the second quarter of 2009 was 70.2%, compared to 68.4% for the same period in 2008.
Selling, general and administrative expenses were $4.0 million for the second quarter of 2009, a decrease of 21.1% compared to $5.1 million for the same period in 2008. The selling and administrative expenses as a percentage of sales was 19.5% for the second quarter of 2009 compared to 25.9% for the same period in 2008. This decrease was primarily due to the decrease in salary and insurance expenses as a result of salary reductions and reduced headcount, research and development expenses and commission expenses.
Cost of sales for the six months ended June 30, 2009 increased to $11.9 million, an increase of 15.7% compared to $10.2 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 six months ended June 30, 2009 was $26.9 million, an increase of 21.2% compared to $22.2 million for the same period in 2008. The gross profit margin was 69.4% compared to 68.5% for the same period in 2008. These increases were mainly due to the increase of revenue overall and the increase in the portion of the products the Company sold bearing a higher profit margin than that for the same period of 2008.
Selling, general and administrative expenses for the six months ended June 30, 2009 were $7.1 million, a decrease of 14.3% compared to $8.3 million in the same period in 2008. For the six months ended June 30, 2009, selling, general and administrative expenses as a percentage of sales was 18.4%, compared to 25.7% for the same period in 2008. This decrease was mainly due to the decrease in salary and insurance expenses as a result of salary reductions.
In China, Tiens sells its products to Tianjin Tianshi Biological Engineering Co., Ltd. ("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 June 30, 2009, Tiens had $121.3 million of retained earnings and total shareholders' equity of $168.0 million.
Jinyuan Li, Chairman, President and CEO of Tiens, said, "Tiens is pleased to report another quarter of positive results including a significant increase in net income. We are confident that international sales will remain strong and that domestic sales will return to, and potentially exceed, previous levels as customers begin to replenish stored up products. We are committed to further expanding our growing international customer base, gaining greater market share in China, 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, 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 AND SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (Unaudited) Three months ended Six months ended June 30, June 30, 2009 2008 2009 2008 REVENUE - RELATED PARTIES $20,551,036 $19,654,447 $38,788,581 $32,475,268 COST OF SALES - RELATED PARTIES 6,117,409 6,203,705 11,852,468 10,243,765 GROSS PROFIT 14,433,627 13,450,742 26,936,113 22,231,503 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,014,591 5,088,597 7,145,527 8,335,796 INCOME FROM OPERATIONS 10,419,036 8,362,145 19,790,586 13,895,707 Interest expense (53,201) (80,078) (105,817) (132,662) Interest income 100,779 268,517 186,547 505,849 Other (expense) (28,144) (1,246,287) (73,432) (986,864) OTHER (EXPENSE) INCOME, NET 19,434 (1,057,848) 7,298 (613,677) INCOME BEFORE INCOME TAXES 10,438,470 7,304,297 19,797,884 13,282,030 INCOME TAXES 123,101 1,664,054 482,716 3,144,448 NET INCOME 10,315,369 5,640,243 19,315,168 10,137,582 LESS: Net income attributable to the noncontrolling interest (139,071) (998,642) (546,045) (1,887,079) NET INCOME ATTRIBUTABLE TO THE COMPANY 10,176,298 4,641,601 18,769,123 8,250,503 OTHER COMPREHENSIVE INCOME Foreign currency translation adjustment 10,989 2,675,768 210,992 7,099,628 COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY 10,187,287 7,317,369 18,980,115 15,350,131 COMPREHENSIVE INCOME ATTRIBUTABLE TO THE NON CONTROLLING INTEREST 140,300 1,174,080 559,895 2,337,664 COMPREHENSIVE INCOME $10,327,587 $8,491,449 $19,540,010 $17,687,795 EARNINGS PER SHARE, BASIC AND DILUTED $0.14 $0.07 $0.26 $0.12 WEIGHTED AVERAGE SHARES OUTSTANDING 71,333,586 71,333,586 71,333,586 71,333,586 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 2009 AND DECEMBER 31, 2008 June 30, December 31, 2009 2008 (Unaudited) A S S E T S CURRENT ASSETS: Cash $10,387,475 $20,992,573 Cash related to assets held for sale 23,953,055 23,861,938 Total cash 34,340,530 44,854,511 Accounts receivable, trade - related parties, net of allowance for doubtful accounts of $913,486 and $1,108,789 as of June 30, 2009 and December 31, 2008, respectively 29,702,386 23,941,431 Inventories 5,032,446 8,365,607 Other receivables 801,210 813,591 Other receivables - related parties 13,494,896 15,729,076 Employee advances 194,073 112,591 Prepaid expenses 737,779 301,898 Prepaid taxes 1,717,898 1,531,207 Other assets held for sale 10,828,631 10,904,842 Total current assets 96,849,849 106,554,754 PROPERTY, PLANT AND EQUIPMENT, net 10,796,643 10,274,643 OTHER ASSETS: Construction in progress 92,323,942 72,300,104 Construction deposits 4,695,601 2,586,302 Intangible assets, net 13,002,520 13,137,195 Other assets 73,050 87,541 Total other assets 110,095,113 88,111,142 Total assets $217,741,605 $204,940,539 L I A B I L I T I E S A N D S H A R E H O L DE R S' E Q U I T Y CURRENT LIABILITIES: Accounts payable $5,237,723 $ $6,283,849 Advances from customers - related parties 3,024,666 3,239,650 Wages and benefits payable 747,381 1,449,146 Other taxes payable 269,717 117,818 Contractor deposits 321,990 163,248 Contractor payables 14,229,565 11,871,456 Other payables 1,541,229 1,933,743 Other payables - related parties 213,263 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 116,729 122,047 Total current liabilities 27,832,263 33,684,857 NON-CURRENT LIABILITIES Long term debt, net of current portion, related party 1,072,742 2,137,742 Deferred income 11,224,209 11,208,844 Total non current liabilities 12,296,951 13,346,586 Total liabilities 40,129,214 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 9,385,565 9,234,123 Statutory reserves 13,217,217 9,420,783 Retained earnings 121,298,044 106,325,356 Accumulated other comprehensive income 24,062,054 23,851,062 Total shareholders' equity of the company 168,034,214 148,902,658 Noncontrolling interest 9,578,177 9,006,438 Total equity 177,612,391 157,909,096 Total liabilities and equity $217,741,605 $204,940,539 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED) Six months ended June 30, 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net income $19,315,168 $10,137,582 Adjustments to reconcile net income to cash provided by (used in) operating activities: Provision for doubtful accounts (196,863) 37,715 Depreciation 1,112,849
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