NEW YORK, April 5 /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 year ended December 31, 2009.
For 2009, revenue was $62.0 million, compared to $77.2 million for 2008.
Net income for 2009 was $24.8 million, or $0.33 per share, compared to $30.0 million, or $0.39 per share for 2008.
Results for 2009 reflect, in part, a decrease in revenue in China to $27.2 million from $33.7 million for 2008. The revenue decrease is attributed, in part, to a decline in domestic distributors' demand after stocking up on products in 2008. During the third quarter of 2008, Tianshi Engineering announced plans to increase prices of its products which prompted customers to stock up on certain products. Consumer product demand decreases in the first and third quarters of 2009 were offset by some increases in sales during the second and fourth quarters of 2009, which reflect marketing efforts during those periods.
For 2009, international revenue was $34.7 million compared to $43.5 million for 2008.
The decrease in international revenue reflects decreases in sales in the Asia-Pacific and Europe-Asia regions and a general weakness in the global economy. During 2008, China's Administration of Quality Supervision, Inspection and Quarantine carried out a national campaign against unsafe food and substandard products resulting in a general slow-down and backlog of export clearances for Chinese food products. While the lifting of the regulations in late 2008 resulted in overseas customers beginning to purchase more products during the first two quarters of 2009, results for the year reflect the impact of the aforementioned general global economic weakness.
Other Highlights
Cost of sales were $20.2 million in 2009, compared to $24.9 million in 2008. The decrease was primarily due to the corresponding decrease in sales. Cost of sales decreased at a lower rate than revenue, primarily due to fixed costs, which do not increase or decrease in line with sales.
Gross profit was $41.8 million in 2009, compared to $52.4 million in 2008. The gross profit margin for 2009 was 67.5% compared to 67.8% in 2008.
Selling, general and administrative expenses were $16.0 million in 2009 compared to $18.6 million in 2008. The decrease was primarily due to decreases in allowance for bad debt, and salary, advertising and research and development expenses. Selling, general and administrative expenses as a percentage of sales increased to 25.8% from 24.1% primarily due to fixed costs, which do not increase or decrease in line with sales.
As of December 31, 2009, Tiens had $126.4 million of retained earnings and total shareholders' equity of $185.8 million.
Jinyuan Li, Chairman, President and CEO of Tiens, said, "We are steadfast in our commitment to building greater market share in China, expanding our international customer base, and further implementing our strategic plans for long-term domestic and international growth. We remain confident that domestic sales will return to, and potentially exceed, previous levels, as distributors begin to replenish their stock of our products. In addition, we maintain this same positive sentiment regarding international sales, which we expect will benefit from the removal of export restrictions and gradual economic improvement."
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; (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."
For more information, please contact:
Investor Relations
Tiens Biotech Group (USA), Inc.
Tel: +86-22-8213-7594
Fax: +86-22-8213-7594
Email: investor@tiens-bio.com
http://www.tiens-bio.com
Carl Hymans
G. S. Schwartz & Co.
Tel: +1-212-725-4500
Fax: +1-212-725-9188
Email: carlh@schwartz.com
-Tables Follow-
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2009 and 2008
2009 2008
REVENUE - RELATED PARTIES $60,032,968 $77,247,898
REVENUE - THIRD PARTIES 1,943,101 --
COST OF SALES - RELATED PARTIES 18,754,680 24,870,178
COST OF SALES - THIRD PARTIES 1,412,812 --
GROSS PROFIT 41,808,577 52,377,720
SELLING, GENERAL AND ADMINISTRATIVE
EXPENSES 16,009,382 18,574,719
INCOME FROM OPERATIONS 25,799,195 33,803,001
Interest expense (186,543) (266,273)
Interest income 301,709 881,070
Other expense (176,757) (2,099,913)
OTHER (EXPENSE) INCOME, NET (61,591) (1,485,116)
INCOME BEFORE INCOME TAXES 25,737,604 32,317,885
INCOME TAXES 930,703 2,345,474
NET INCOME 24,806,901 29,972,411
LESS: Net income attributable to the
noncontrolling interest (965,557) (2,315,215)
NET INCOME ATTRIBUTABLE TO THE
COMPANY 23,841,344 27,657,196
OTHER COMPREHENSIVE INCOME:
Foreign currency translation
adjustment 441,140 7,891,018
Gain from the release of exchange
reserves (6,030,079) --
COMPREHENSIVE INCOME ATTRIBUTABLE
TO THE COMPANY 18,252,405 35,548,214
COMPREHENSIVE INCOME ATTRIBUTABLE
TO THE NONCONTROLLING INTEREST 993,504 2,764,347
COMPREHENSIVE INCOME $19,245,909 $38,312,561
EARNINGS PER SHARE,
BASIC AND DILUTED $0.33 $0.39
WEIGHTED AVERAGE NUMBER OF SHARES,
BASIC AND DILUTED 71,333,586 71,333,586
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2009 AND DECEMBER 31, 2008
December 31, December 31,
2009 2008
ASSETS
CURRENT ASSETS:
Cash $1,848,328 $20,992,573
Cash related to assets held for
sale -- 23,861,938
Total cash 1,848,328 44,854,511
Accounts receivable, trade -
related parties, net of
allowance for doubtful accounts
of $1,419,178 and $1,108,789
as of December 31, 2009 and
December 31, 2008 , respectively 15,379,312 23,941,431
Inventories 5,328,052 8,365,607
Other receivables 995,657 813,591
Other receivables - related parties 44,561,626 15,729,076
Employee advances 115,673 112,591
Prepaid expenses 658,193 301,898
Prepaid taxes 407,534 1,531,207
Other assets held for sale -- 10,904,842
Total current assets 69,294,375 106,554,754
PROPERTY, PLANT AND EQUIPMENT, net 10,124,483 10,274,643
OTHER ASSETS:
Construction in progress 125,572,621 72,300,104
Construction deposits 1,405,997 2,586,302
Intangible assets, net 12,864,295 13,137,195
Other assets 11,847,937 87,541
Total other assets 151,690,850 88,111,142
Total assets $231,109,708 $204,940,539
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $5,012,157 $6,283,849
Advances from customers -
related parties 4,426,751 3,239,650
Wages and benefits payable 1,484,852 1,449,146
Other taxes payable -- 117,818
Contractor deposits 183,395 163,248
Contractor payables 18,513,216 11,871,456
Other payables 1,151,551 1,933,743
Other payables - related
parties 3,326,110 6,373,900
Current portion of long
term debt, related party -- 2,130,000
Liabilities directly associated
with assets classified as held
for sale -- 122,047
Total current liabilities 34,098,032 33,684,857
NON-CURRENT LIABILITIES
Long term debt, net of current
portion, related party -- 2,137,742
Deferred income 11,236,501 11,208,844
Total non current liabilities 11,236,501 13,346,586
Total liabilities 45,334,533 47,031,443
COMMITMENTS AND CONTINGENCIES
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 18,042,189 9,234,123
Statutory reserves 13,217,217 9,420,783
Retained earnings 126,370,263 106,325,356
Accumulated other
comprehensive income 18,262,123 23,851,062
Total shareholders' equity
of the Company 175,963,126 148,902,658
Noncontrolling interest 9,812,049 9,006,438
Total equity 185,775,175 157,909,096
Total liabilities and equity $231,109,708 $204,940,539
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2009 AND 2008
2009 2008
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $24,806,901 $29,972,411
Adjustments to reconcile net income
to cash provided by (used in)
operating activities:
Provision for doubtful accounts 406,795 1,037,089
Provision for obsolete inventory 309,343 293,648
Depreciation 2,173,251 2,681,167
Amortization 381,742 323,276
Interest income 4,761 55,641
Gain on sale of assets 47,054 39,208
loss on assets written off 5,876 192,833
Rental expense borne by a
related party 326,774 --
(Increase) decrease in assets:
Accounts receivable, trade -
related parties 8,308,993 (17,917,994)
Accounts receivable, trade -
third parties -- 109,674
Other receivables (184,540) 314,367
Other receivables - related
parties 1,668,812 2,538,775
Inventories 2,761,335 (2,167,255)
Employee advances (38,359) (42,928)
Prepaid expense (419,419) 356,136
Increase (decrease) in
liabilities:
Accounts payable (1,249,152) 2,007,985
Advances from customers -
related parties 1,178,463 1,402,445
Wages and benefits payable (43,279) 195,555
Other taxes payable 968,294 (2,654,720)
Other payables (650,296) 459,357
Other payables - related parties 3,107,699 (390,158)
Net cash provided by operating
activities 43,871,048 18,806,512
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash outflow arising from disposal
of a subsidiary (23,975,473) --
Collections from loans to local
government 105,229 457,329
Acquisition of intangible assets -- (6,068,759)
Construction deposits (2,664,741) (4,391,560)
Contractor deposits 19,734 (464,499)
Addition to construction in progress (42,734,161) (25,714,095)
Equipment deposits (11,782,984) --
Proceeds from sales of properties 29,131 426,288
Purchase of equipment and
automobiles (2,009,536) (1,531,589)
Net cash used in investing
activities (83,012,801) (37,286,885)
CASH FLOWS FROM FINANCING ACTIVITIES:
Loan from (repayment to) related
parties (3,946,860) 6,080,385
Payment on other payables-non
current -- (282,664)
Payments on long term debt, related
party -- (1,197,662)
Payments to minority interest
shareholder -- (5,150,414)
Increase in paid in capital -- 482,516
Increase in deferred income -- 5,891,999
Net cash provided by (used in)
financing activities (3,946,860) 5,824,160
EFFECT OF EXCHANGE RATE CHANGES ON
CASH 82,430 3,428,876
DECREASE IN CASH (43,006,183) (9,227,337)
CASH, beginning of period 44,854,511 54,081,848
CASH, end of period $1,848,328 $44,854,511
Supplemental disclosures of cash flow
information
Cash paid during the period for:
Interest $105,817 $266,273
Income taxes $3,287,531 $3,877,420
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
REVENUE BY REGION
Twelve months ended
December 31,
2009 2008 Change
China $27,241,333 $33,711,474 -19.20%
International $34,734,736 $43,536,424 -20.20%
Total $61,976,069 $77,247,898 -19.80%
