omniture

Tiens Biotech Group (USA) Reports Second Quarter and Six-Month Results

2010-08-20 02:31 1556
    NEW YORK, Aug. 20 /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 second quarter and six months ended June 30, 2010.

    Revenue for the second quarter of 2010 was $8.2 million, compared to $20.6 million for the second quarter of 2009. Revenue for the six months ended June 30, 2010 was $19.6 million, compared to $38.8 million for the first six months of 2009. 

    Net income for the second quarter of 2010 was $0.5 million, or $0.01 per share, compared to net income of $10.3 million, or $0.14 per share, for the 2009 second quarter. For the six months ended June 30, 2010, net income was $4.1 million, or $0.5 per share, compared to $19.3 million, or $0.26 per share for the first six months of 2009. 

    The decrease in revenue was mainly due to a decrease in international sales which reflects China's Administration of Quality Supervision, Inspection and Quarantine carrying out a national campaign against unsafe food and substandard products in 2008, 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 in the first two quarters of 2009. Second quarter 2010 sales to Indonesia, Russia, Vietnam and Peru further decreased due to the distributors in these countries purchasing more products in the first half of 2009, after the 2008 product scarcity. The decrease in sales in China was mainly due to domestic distributors' reduced purchasing demand following their stocking up of products during 2009. Management believes the decrease in revenues is temporary, and that revenue growth will resume in the near future. 

    Other Highlights  

    Cost of sales for the second quarter of 2010 decreased to $3.0 million, or 50.3%, compared to $6.1 million for the same period in 2009. For the six months ended June 30, 2010, cost of sales was $6.5 million, a decrease of 45.3% compared to $11.9 million for the same period in 2009. Cost of sales for the period decreased 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 second quarter of 2010 was $5.1 million, a decrease of 64.5% compared to $14.4 million for the same period in 2009. The gross profit margin for the second quarter of 2010 was 62.8%, compared to 70.2% for the same period in 2009. For the six months ended June 30, 2010, gross profit was $13.1 million, a decrease of 51.4% compared to the same period in 2010, and the gross profit margin was 66.9% compared to 69.4% for the same period in 2009. These decreases were mainly due to the decrease of revenue overall and fixed costs, which do not increase or decrease in line with revenue changes.

    Selling, general and administrative expenses were $4.1 million for the second quarter of 2010, an increase of 1.4% compared to $4.0 million for the same period in 2009. This increase was primarily due to the increase in research and development expenses. Selling, general and administrative expenses as a percentage of sales were 49.8% for the second quarter of 2010 compared to 19.5% for the same period in 2009. For the six months ended June 30, 2010, selling, general and administrative expenses were $7.6 million, an increase of 5.9% compared to $7.1 million in the same period in 2009. This increase was mainly due to the increase in research and development expense. For the six months ended June 30, 2010, selling, general and administrative expenses as a percentage of sales was 38.7%, compared to 18.4% for the same period in 2009.

    As of June 30, 2010, Tiens had $126.8 million of retained earnings and total shareholders' equity of $180.4 million. 

    Jinyuan Li, Chairman, President and CEO of Tiens, said, "We believe that our international and domestic sales will return to and possibly exceed previous levels as our domestic and overseas affiliated companies have indicated that they are not seeing sizable declines of their revenue, and that they expect that the market fluctuation will be temporary. They believe that revenue growth will resume in the near future, consistent with what they have achieved during the majority of the past 15 years. We remain committed to building greater market share in China, expanding our international customer base, and remaining focused on our efforts to generate long-term domestic and international 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 54 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 92 branches. Outside of China, Tiens sells its products to affiliated companies in 54 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; whether Tianshi Engineering, the Company's affiliate which sells its products in China, obtains a direct selling license in China; 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 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 AND SIX MONTHS ENDED JUNE 30, 2010 and 2009 (UNAUDITED)
    
    
                         Three months ended June 30,  Six months ended June 30,
                             2010        2009           2010         2009
    REVENUE - RELATED 
     PARTIES              $8,167,849  $20,551,036    $19,571,212  $38,788,581
    
    COST OF SALES -   
     RELATED PARTIES       3,037,847    6,117,409      6,478,728   11,852,468
    
    GROSS PROFIT           5,130,002   14,433,627     13,092,484   26,936,113
    
    SELLING, GENERAL  
     AND ADMINI-
     STRATIVE EXPENSES     4,069,097    4,014,591      7,566,644    7,145,527
    
    INCOME FROM OPERATIONS 1,060,905   10,419,036      5,525,840   19,790,586
    
      (Interest expense)          --      (53,201)            --     (105,817)
      Interest income          3,846      100,779          5,718      186,547
      Other expense         (418,260)     (28,144)      (671,970)     (73,432)
    OTHER (EXPENSE)   
     INCOME, NET            (414,414)      19,434       (666,252)       7,298
    
    INCOME BEFORE     
     INCOME TAXES            646,491   10,438,470      4,859,588   19,797,884
    
    INCOME TAXES             138,621      123,101        748,123      482,716
    
    NET INCOME              $507,870   10,315,369      4,111,465   19,315,168
    
    LESS: Net income  
     attributable to  
     the noncontrolling   
     interest               (122,083)    (139,071)      (464,140)    (546,045)
    
    NET INCOME        
     ATTRIBUTABLE TO  
     THE COMPANY             385,787   10,176,298      3,647,325   18,769,123
    
    OTHER COMPREHENSIVE    
     INCOME:
      Foreign currency    
       translation 
       adjustment            766,901      151,289      1,125,269      770,887
    
    COMPREHENSIVE     
     INCOME                1,152,688   10,327,587      4,772,594   19,540,010
    
    COMPREHENSIVE     
     INCOME ATTRI-
     BUTABLE TO THE            
     NONCONTROLLING   
     INTEREST                163,465      140,300        506,863      559,895
    
    COMPREHENSIVE     
     INCOME ATTRIBUTABLE
     TO THE COMPANY         $989,223  $10,187,287     $4,265,731  $18,980,115
    
    EARNINGS PER      
     SHARE, BASIC
     AND DILUTED               $0.01        $0.14          $0.05        $0.26
    
    WEIGHTED AVERAGE  
     NUMBER OF SHARES,
     BASIC AND DILUTED    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, 2010 (UNAUDITED) AND DECEMBER 31, 2009
        
                                                  June 30,        December 31,
                                                    2010              2009
                                                (Unaudited)
                    ASSETS
    
    CURRENT ASSETS:
      Cash                                       $5,660,772        $1,848,328
      Accounts receivable, trade - related
       parties, net of allowance for 
       doubtful accounts of $1,307,687 and
       $1,419,178 as of June 30, 2010 and
       December 31, 2009, respectively            8,809,737        15,379,312
      Inventories                                 5,776,964         5,328,052
      Other receivables                           2,354,237           995,657
      Other receivables - related parties        33,035,274        44,561,626
      Employee advances                             238,075           115,673
      Prepaid expenses                              351,905           658,193
      Prepaid taxes                                 121,542           407,534
        Total current assets                     56,348,506        69,294,375
    
    PROPERTY, PLANT AND EQUIPMENT, net            9,946,030        10,124,483
    
    OTHER ASSETS:
      Construction in progress                  146,343,059       125,572,621
      Construction deposits                       5,068,290         1,405,997
      Intangible assets, net                     12,764,848        12,864,295
      Other assets                               18,039,203        11,847,937
        Total other assets                      182,215,400       151,690,850
    
          Total assets                         $248,509,936      $231,109,708
    
         LIABILITIES AND SHAREHOLDERS' EQUITY
    
    CURRENT LIABILITIES:
      Accounts payable                           $4,387,829        $5,012,157
      Advances from customers - related   
       parties                                   17,055,922         4,426,751
      Wages and benefits payable                    788,451         1,484,852
      Income taxes payable                          330,095                --
      Contractor deposits                           258,403           183,395
      Contractor payables                        20,942,557        18,513,216
      Other payables                              1,248,953         1,151,551
      Other payables - related parties            1,502,767         3,326,110
        Total current liabilities                46,514,977        34,098,032
    
    NON-CURRENT LIABILITIES
      Deferred income                            11,283,364        11,236,501
        Total non current liabilities            11,283,364        11,236,501
    
        Total liabilities                        57,798,341        45,334,533
    
    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                          18,194,133        18,042,189
        Statutory reserves                       16,465,144        13,217,217
        Retained earnings                       126,769,661       126,370,263
        Accumulated other comprehensive   
         income                                  18,880,529        18,262,123
          Total shareholders' equity of   
           the Company                          180,380,801       175,963,126
        Noncontrolling interest                  10,330,794         9,812,049
        Total equity                            190,711,595       185,775,175
          Total liabilities and equity         $248,509,936      $231,109,708



                TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
    
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
           FOR THE SIX MONTHS ENDED JUNE 30, 2010 AND 2009 (UNAUDITED)
    
                                                  Six months ended June 30,
                                                   2010              2009
    CASH FLOWS FROM OPERATING           
     ACTIVITIES:
      Net income                                $4,111,465       $19,315,168
      Adjustments to reconcile net      
       income to cash provided by 
       (used in) operating activities:
        Bad debt expense                          (116,962)         (196,863)
        Depreciation                               814,376         1,112,849
        Amortization                               167,147           194,380
        Interest expense                                --             2,710
        Gain on sale of assets                     (15,085)          (15,717)
        Rental expense borne by a       
         related party                             163,532           163,331
       (Increase) decrease in assets:
        Accounts receivable, trade -    
         related parties                         6,725,384        (5,532,449)
        Other receivables                       (1,349,264)           10,743
        Other receivables - related     
         parties                                   213,304          (992,241)
        Inventories                               (421,815)        3,355,993
        Employee advances                         (121,454)          (80,805)
        Prepaid expense                            307,795          (435,576)
       Increase (decrease) in           
        liabilities:
        Accounts payable                          (662,699)       (1,579,065)
        Advances from customers -       
         related parties                        12,562,625          (219,470)
        Wages and benefits payable                (699,884)         (703,898)
        Other taxes payable                        615,431             8,920
        Other payables                              94,272          (395,970)
        Other payables - related parties           191,991          (202,847)
         Net cash provided by operating 
          activities                            22,580,159        13,809,193
    
    CASH FLOWS FROM INVESTING           
     ACTIVITIES:
      Investment in Life Resources               6,000,000                --
      Collections from loans to local   
       government                                       --           105,193
      Proceeds from disposal of a       
       subsidiary                                  700,000                --
      Construction deposits                     (2,678,074)       (3,846,961)
      Contractor deposits                           73,959           158,551
      Addition to construction in       
       progress                                (18,790,772)      (15,954,182)
      Equipment deposits                        (6,133,065)              -
      Proceeds from sales of properties          2,621,558            17,039
      Purchase of equipment and         
       automobiles                                (578,794)         (921,388)
         Net cash used in investing     
          activities                           (18,785,188)      (20,441,748)
    
    CASH FLOWS FROM FINANCING           
     ACTIVITIES:
      Loan from (repayment to) related  
       parties                                          --        (3,945,510)
         Net cash used in financing     
          activities                                    --        (3,945,510)
    
    EFFECT OF EXCHANGE RATE CHANGES
     ON CASH                                        17,473            64,084
    
    NET INCREASE (DECREASE) IN CASH              3,812,444       (10,513,981)
    
    CASH, beginning of period                    1,848,328        44,854,511
    
    CASH, end of period                         $5,660,772       $34,340,530
    
    Supplemental disclosures of cash    
     flow information
      Cash paid during the period for:
       Interest                                       $ --          $105,817
       Income taxes                               $913,722          $667,347


 
                 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES 
                                  REVENUE BY REGION
                                                                         
                                   Three months ended                      
                                         June 30,                           
                                    2010            2009              Change 
                                                                         
    China                       $4,415,082      $9,669,603            -54.3 %
    International               $3,752,767     $10,881,433            -65.5 %
    Total                       $8,167,849     $20,551,036            -60.3 %

                                                                           
                                    Six months ended                       
                                          June 30,                           
                                    2010            2009              Change 
                                                                         
    China                      $11,198,355     $12,412,223             -9.8 %
    International               $8,372,857     $26,376,358            -68.3 %
    Total                      $19,571,212     $38,788,581            -49.5 %
Source: Tiens Biotech Group (USA), Inc.
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