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Tiens Biotech Group (USA) Reports Second Quarter and Six-Month Results
Date:8/14/2009

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 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.

Other Highlights

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           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: investor@tiens-bio.com

     Carl Hymans
     G. S. Schwartz & Co.
     Tel:   +1-212-725-4500
     Fax:   +1-212-725-9188
     Email: carlh@schwartz.com


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SOURCE Tiens Biotech Group (USA), Inc.
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