omniture

Tiens Biotech Group (USA) Reports 2009 Results

2010-04-02 23:21 797

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%

Source: Tiens Biotech Group (USA), Inc.
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