omniture

Tiens Biotech Group (USA) Reports Third Quarter and Nine-Month Results

2010-11-16 03:44 1195

NEW YORK, Nov. 16, 2010, PRNewswire-Asia/ -- Tiens Biotech Group (USA), Inc. (the "Company" or "Tiens", NYSE AMEX: TBV), www.tiens-bio.com, today announced financial results for the third quarter and nine months ended September 30, 2010.

Revenue for the third quarter of 2010 was $10.4 million, compared to $9.4 million for the third quarter of 2009. Revenue for the nine months ended September 30, 2010 was $30.0 million, compared to $48.2 million for the first nine months of 2009.

Net income for the third quarter of 2010 was $1.9 million, or $0.02 per share, compared to net income of $2.9 million, or $0.03 per share, for the 2009 third quarter. For the nine months ended September 30, 2010, net income was $6.0 million, or $0.08 per share, compared to $22.2 million, or $0.29 per share for the first nine months of 2009.

The increase in revenue for the third quarter ended September 30, 2010 reflects an increase in domestic sales of 32%. The decrease in revenue for the nine months ended September 30, 2010 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 three quarters of 2009. The decrease reflects no sales to Indonesian distributors during the first nine months of 2010 given they purchased more products in 2009 after the aforementioned 2008 product scarcity. The sales decline to Indonesia accounts for 57% of the total international revenue decrease for the nine months ended September 30, 2010.

In October, the Company relocated its corporate headquarters to its 250-acre Tiens International Health Industrial Park research and development, manufacturing and logistic facilities approximately four miles from its previous location. The Life Resources facility will incorporate manufacturing, warehouses, work plants, a power center and dormitories. The center positions the Company well to increase manufacturing capacity to meet future growth opportunities.

Other Highlights

Cost of sales for the third quarter of 2010 was $4.1 million compared to $3.1 million for the same period in 2009. For the nine months ended September 30, 2010, cost of sales was $10.6 million compared to $15.0 million for the same period in 2009. The increase in cost of sales for the third quarter of 2010, as compared to the like quarter of 2009, is due to the sale of products with higher costs.

Gross profit for the third quarter of 2010 was $6.2 million, a decrease of 0.9% compared to $6.3 million for the same period in 2009. The gross profit margin for the third quarter of 2010 was 60.1%, compared to 66.7% for the same period in 2009. For the nine months ended September 30, 2010, gross profit was $19.3 million, a decrease of 41.8% compared to $33.2 million for the same period in 2010, and the gross profit margin was 64.5% compared to 68.9% for the same period in 2009.

The decrease in profit margin for the third quarter of 2010 reflects Company products with more than 65% profit margins being 27.4% of revenues as compared to 31.1% in the third quarter of 2009 and  the U.S. dollar depreciating approximately 2% between September 30, 2009 and September 30, 2010. The Company's international sales are quoted in U.S. dollars and collected in RMB, therefore, gross profit margin decreased by the same percentage as the depreciation of the U.S. dollar.

Selling, general and administrative expenses were $4.1 million for the third quarter of 2010, an increase of 39.3% compared to $2.9 million for the same period in 2009. This increase was primarily due to a relative increase in bad debt expense. Selling, general and administrative expenses as a percentage of sales were 39.1% for the third quarter of 2010 compared to 30.9% for the same period in 2009. For the nine months ended September 30, 2010, selling, general and administrative expenses were $11.6 million, an increase of 15.6% compared to $10.1 million in the same period in 2009. This increase was mainly due to the aforementioned increase in bad debt expense. For the nine months ended September 30, 2010, selling, general and administrative expenses as a percentage of sales were 38.8%, compared to 20.9% for the same period in 2009.

As of September 30, 2010, Tiens had $128.5 million of retained earnings and total shareholders' equity of $195.3 million.

Jinyuan Li, Chairman, President and CEO of Tiens, said, "We are pleased to report an increase in domestic sales which we believe will continue in the future. Our total revenue decline should be temporary since both our domestic and global affiliated companies have not witnessed significant declines in their overall revenue. We are committed to expanding our international customer base and generating long-term domestic and international growth."

About Tiens Biotech Group (USA), Inc. 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."

CONTACT:






Investor Relations

Debra Berliner


Tiens Biotech Group (USA), Inc.

G. S. Schwartz & Co.


Tel:   +86-22-8213-7594

Tel:  212-725-4500


Fax:  +86-22-8213-7594

Fax: 212-725-9188


Email: investor@tiens-bio.com

Email: dberliner@schwartz.com


http://www.tiens-bio.com







-Tables Follow-

TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES












CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME


FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2010 and 2009 (UNAUDITED)























Three months ended September 30,

Nine months ended September 30,




2010


2009


2010


2009


REVENUE - RELATED PARTIES

$

10,381,886

$

9,439,739

$

29,953,098

$

48,228,320












COST OF SALES - RELATED PARTIES


4,145,014


3,144,650


10,623,742


14,997,118












GROSS PROFIT    


6,236,872


6,295,089


19,329,356


33,231,202












SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES        


4,060,812


2,916,202


11,627,456


10,061,729












INCOME FROM OPERATIONS


2,176,060


3,378,887


7,701,900


23,169,473












   Interest expense


(117,165)


(40,363)


(117,165)


(146,180)


   Interest income


2,523


76,154


8,241


262,701


   Other income (expense)


120,665


(16,122)


(551,305)


(89,554)


OTHER (EXPENSE) INCOME, NET


6,023


19,669


(660,229)


26,967












INCOME BEFORE INCOME TAXES


2,182,083


3,398,556


7,041,671


23,196,440












INCOME TAXES


319,776


544,688


1,067,899


1,027,404












NET INCOME

$

1,862,307

$

2,853,868

$

5,973,772

$

22,169,036












LESS: Net income attributable to the noncontrolling interest


(141,849)


(617,638)


(605,989)


(1,163,683)












NET INCOME ATTRIBUTABLE










TO THE SHAREHOLDERS OF THE COMPANY


1,720,458


2,236,230


5,367,783


21,005,353












OTHER COMPREHENSIVE INCOME:










    Foreign currency translation adjustment


2,826,688


182,028


3,951,957


406,870












COMPREHENSIVE INCOME


4,547,146


2,418,258


9,319,740


21,412,223












COMPREHENSIVE INCOME ATTRIBUTABLE










TO THE NONCONTROLLING INTEREST


312,353


11,390


819,216


25,240












COMPREHENSIVE INCOME ATTRIBUTABLE










TO THE SHAREHOLDERS OF THE COMPANY

$

4,234,793

$

2,406,868

$

8,500,524

$

21,386,983












EARNINGS PER SHARE,










BASIC AND DILUTED

$

0.02

$

0.03

$

0.08

$

0.29












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 SEPTEMBER 30, 2010 (UNAUDITED) AND DECEMBER 31, 2009


















September 30,


December 31,







2010


2009







(Unaudited)







A S S E T S















CURRENT ASSETS:







Cash



$

7,632,304

$

1,848,328



Accounts receivable, trade - related parties, net of allowance for doubtful accounts
of $1,538,200 and $1,419,178 as of September 30, 2010 and December 31, 2009, respectively


10,795,741


15,379,312



Inventories



5,287,668


5,328,052



Other receivables


1,256,939


995,657



Other receivables - related parties


45,040,773


44,561,626



Employee advances


114,444


115,673



Prepaid expenses, net of allowance for doubtful accounts of $1,039,643 and $1,018,474
as of September 30, 2010 and December 31, 2009, respectively


431,442


658,193



Prepaid taxes


3,001,473


407,534




Total current assets


73,560,784


69,294,375











PROPERTY, PLANT AND EQUIPMENT, net


9,910,704


10,124,483











OTHER ASSETS:







Construction in progress


170,971,153


125,572,621



Construction deposits


8,250,520


1,405,997



Intangible assets, net


12,898,229


12,864,295



Other assets


13,507,370


11,847,937




Total other assets


205,627,272


151,690,850














Total assets

$

289,098,760

$

231,109,708











L I A B I L I T I E S    A N D   S H A R E H O L D E R S'   E Q U I T Y











CURRENT LIABILITIES:







Accounts payable

$

6,350,030

$

5,012,157



Advances from customers - related parties


13,045,749


4,426,751



Wages and benefits payable


808,228


1,484,852



Short-term debt - related party


8,958,000


-



Income taxes payable


570,185


-



Contractor deposits


204,451


183,395



Contractor payables


35,554,584


18,513,216



Other payables


1,164,677


1,151,551



Other payables - related parties


15,630,625


3,326,110




Total current liabilities


82,286,529


34,098,032











NON-CURRENT LIABILITIES







Deferred income                                                                                                  


11,470,050


11,236,501




Total non current liabilities


11,470,050


11,236,501













Total liabilities


93,756,579


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


18,271,518


18,042,189




Statutory reserves


16,465,144


13,217,217




Retained earnings


128,490,119


126,370,263




Accumulated other comprehensive income


21,394,864


18,262,123





Total shareholders' equity of the Company


184,692,979


175,963,126




Noncontrolling interest


10,649,202


9,812,049




Total equity


195,342,181


185,775,175





Total liabilities and equity

$

289,098,760

$

231,109,708













TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES












CONSOLIDATED STATEMENTS OF CASH FLOWS


FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2010 AND 2009 (UNAUDITED)

















Nine months ended September 30,








2010


2009


CASH FLOWS FROM OPERATING ACTIVITIES:







Net income

$

5,973,772

$

22,169,036



Adjustments to reconcile net income to cash provided by (used in) operating activities:



















Bad debt expense


88,205


(902,297)





Depreciation


1,172,597


1,662,206





Amortization


252,075


291,418





Interest expense


117,165


(9,357)





Gain on sale of assets


(43,377)


(14,846)





Rental expense borne by a related party


246,623


-




(Increase) decrease in assets:









Accounts receivable, trade - related parties


4,742,772


10,678,476





Other receivables


(237,041)


(121,058)





Other receivables - related parties


(92,265)


(1,306,527)





Inventories


166,337


2,801,809





Employee advances


3,579


(80,873)





Prepaid expense


236,536


(336,620)




Increase (decrease) in liabilities:









Accounts payable


1,195,483


(1,687,613)





Advances from customers - related parties


8,401,340


808,830





Wages and benefits payable


(697,018)


(768,334)





Deferred income taxes


217,131


-





Other taxes payable


(2,202,718)


(31,337)





Other payables


(8,613)


(176,274)





Other payables - related parties


13,972,418


(76,484)






Net cash provided by operating activities


33,505,001


32,900,155












CASH FLOWS FROM INVESTING ACTIVITIES:







Proceeds from disposal of a subsidiary


700,000


-



Collections from loans to local government


-


105,208



Construction deposits


(6,381,248)


(3,465,755)



Contractor deposits


16,990


85,498



Addition to construction in progress


(37,556,932)


(26,936,754)



Equipment deposits


(1,414,417)


(8,700,872)



Proceeds from sales of properties


2,668,075


17,041



Purchase of equipment and automobiles


(742,954)


(1,755,815)






Net cash used in investing activities


(42,710,486)


(40,651,449)












CASH FLOWS FROM FINANCING ACTIVITIES:







Loan from (repayment to) related parties


14,826,000


(3,946,050)



Increase in paid in capital


-


245,030






Net cash provided by (used in) financing activities


14,826,000


(3,701,020)












EFFECT OF EXCHANGE RATE CHANGES ON CASH


163,461


100,433












NET INCREASE (DECREASE) IN CASH


5,783,976


(11,351,881)












CASH, beginning of period


1,848,328


44,854,511






















CASH, end of period

$

7,632,304

$

33,502,630












Supplemental disclosures of cash flow information







Cash paid during the period for:








Interest

$

-

$

105,817




Income taxes

$

993,857

$

871,764














TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES REVENUE BY REGION








Three months ended




September 30,









    2010

    2009

Change







China  

$  6,152,896

$ 4,663,939

31.9%


International

$  4,228,990

$ 4,775,800

-11.4%


Total

$10,381,886

$ 9,439,739

10.0%



















Nine months ended




September 30,









    2010

    2009

Change







China  

$17,351,251

$17,076,163

1.6%


International

$12,601,847

$31,152,158

-59.5%


Total

$29,953,098

$48,228,320

-37.9%



Source: Tiens Biotech Group (USA), Inc.
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