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Yew Bio-Pharm Group Reports 2017 Fourth Quarter and Full Year Financial Results

2018-04-03 04:10 1033

EL MONTE, Calif., April 3, 2018 /PRNewswire/ -- Yew Bio-Pharm Group, Inc. ("Yew Bio" or the "Company") (OTCQB: YEWB), a major grower and seller of yew trees, yew raw materials used in the manufacture of traditional Chinese medicine, handicraft products made from yew timber and yew candle and soap made with yew essential oil in China, today reported financial results for the three- and twelve-months ended December 31, 2017.

2017 Fourth Quarter Results


Three Months Ended December 31,

Twelve Months Ended December 31,


2017

2016

2017

2016

Revenues:





TCM Raw Materials

$3,169,400

$4,703,017

$20,180,406

$28,766,815

Yew Trees

72

(387)

9,978

22,859

Handicrafts

45,275

643

50,559

98,203

Others

2,280,188

7,297,231

20,298,747

22,460,205

Total Revenues

$5,494,935

$12,000,504

$40,539,690

$51,348,082

 

Total revenue for the fourth quarter of 2017 decreased 54.2% to $5.5 million from $12.0 million a year ago. Sales of TCM raw materials amounted to 57.7% of total revenues; sales of others segment consisting with yew essential oil candle, yew essential oil soap, pine needle extract, complex Taxus Cuspidate extract and composite northeast yew extract amounted to 41.5% of total revenues; sales of handicrafts amounted to 0.8% of total revenues, and sales of yew trees amounted to 0.0% of total revenues which is due to the Company's strategy adjustment to reserve more yew trees for future TCM raw materials sales.

For the 2017 fourth quarter, gross profit was a loss of $6.8 million, compared with a loss of 1.2 million. The loss for the fourth quarter of 2017 was primarily due to adjustment of inventory and yew forest assets based on our physical inventory observation.

Operating expenses increased 460.9% to $878,089 for the 2017 fourth quarter, from $156,546 in the year-ago quarter. The increasing was primarily attributable to the increase in compensation and related benefits and Other fees.

Net income in the fourth quarter of 2016 was a loss of $7.8 million, or a loss of $0.14 per diluted share, compared with a loss of $1.4 million in the year-ago quarter, or a loss of $0.03 per diluted share.

2017 Results

Total revenues for the 2017 fiscal year were $40.5 million, a 21.0% decrease from $51.3 million a year earlier. Sales of TCM raw materials amounted to 49.8% of total revenues, sales of yew trees amounted to 0.0% of total revenues, sales of handicrafts amounted to 0.1% of total revenues and sales of others consisting with yew essential oil candle, yew essential oil soap, pine needle extract, complex Taxus Cuspidate extract and composite northeast yew extract made up the remaining 50.1%.

Gross profit was $5.1 million, or 12.5% of total revenues, for the full year, compared with $3.2 million, or 6.3% of total revenues in 2016. 

Operating expenses increased 56.1% to $1.7 million for the year ended December 31, 2017, from 1.1 million a year earlier. The increasing was primarily attributable to the increases in compensation and related benefits and Other fees.

Net income for 2017 increased to $3.2 million, or 0.06 per diluted share, from $2.0 million, or $0.04 per diluted share for 2016.

"Our TCM raw materials and Others segment sales contributed most of our revenues for the year 2017," said Mr. Zhguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group, Inc. "We developed a series of yew product derivatives such as yew oil candle, yew essential oil soap, face serum and moisturizer cosmetics which contain yew essential oil, functional pillow, complex Taxus Cuspidate extract and composite northeast yew extract since from year 2015, and these products have been accepted by more and more customers of the U.S. and Chinese market. We also established a yew product retail and experience store in San Gabriel, California in 2017, and we hope to introduce our yew products to the U.S. customers by establishing more experience stores in the future."

"Our face serum and moisturizer cream cosmetics containing yew essential oil had formally launched to the market during the fourth quarter of 2017, and now we are working with our Chinese distributors to complete the application to export to Chinese market. We expect the application to be finished during six to nine months. Meanwhile, we are also exploring major U.S. distributors to seek listing our cosmetics on the shelf. As we announced in the earlier news, we have been through to explore the transformation of the Company's business model from a forestry company to a high value-added manufacturer mainly utilizes the yew tree raw materials as basis. Looking ahead in 2018, we will continue to enrich our product mix and develop more value-added products for the Company, and we expect the Company to achieve sustained growth with the new business."

ABOUT YEW BIO-PHARM GROUP, INC

Yew Bio-Pharm Group, Inc., through its operating entity, Harbin Yew Science and Technology Development Co., Ltd. (HDS), is a major grower and seller of yew trees, yew raw materials used in the manufacture of traditional Chinese medicine (TCM) and products made from yew timber in China. Raw material from the species of yew tree that the Company grows contains taxol, and TCM containing yew raw materials has been approved as a traditional Chinese medicine in China for secondary treatment of certain cancers. The Company uses a patented, accelerated growth technology to speed the growth and maturity and commercialization of yew trees and believes that it is one of the few companies possessing a permit to sell them. Yew Bio-Pharm also recently established a division to focus on organic foods and dietary supplements with the aim of developing new business opportunities in related industries. To learn more, please visit www.yewbiopharm.com

SAFE HARBOR

This press release forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements involve a number of risks and uncertainties that could cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our ability to collect from our largest customers; our dependence on a small number of customers for raw materials, including a related party; our ability to continue to purchase raw materials at relatively stable prices; our dependence on a small number of customers for our yew trees for reforestation; our ability to market successfully raw materials used in the manufacture of traditional Chinese medicines; and our ability to receive continued preferential tax treatment for the sale of yew trees and potted yew trees. From time to time, these risks, uncertainties and other factors are discussed in the Company's filings with the U.S. Securities and Exchange Commission, including its most recent annual report on Form 10-K. Yew Bio does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.

Company Contact:

Henry Pang
Yew Bio-Pharm Group, Inc.
Tel: (626) 401-9588
hpang@yewbiopharm.com

 

(financial tables follow)

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS



December 31,


2017


2016





ASSETS




CURRENT ASSETS:




Cash

$

859,830


$

278,991

Accounts receivable


9,881,914



14,467,852

Accounts receivable - related parties


21,847,733



6,941,931

Inventories, net


2,579,190



10,296,792

Prepaid expenses - related parties


57,202



76,995

Prepaid expenses and other assets


37,519



74,783

VAT recoverables


170,564



1,655,954







Total Current Assets


35,433,952



33,793,298







LONG-TERM ASSETS:






Long-term inventories, net


10,546,648



7,151,613

Property and equipment, net


579,557



692,116

Land use rights and yew forest assets, net


6,369,938



4,558,234







Total Long-term Assets


17,496,143



12,401,963







Total Assets

$

52,930,095


$

46,195,261







LIABILITIES AND SHAREHOLDERS' EQUITY






CURRENT LIABILITIES:






Accounts payable

$

460,202


$

2,700,148

Accounts payable - related parties


50,318



638,318

Accrued expenses and other payables


162,619



379,294

Note payable


-



1,156,444

Taxes payable


5,574



16,520

Due to related parties


619,999



883,596

Short-term borrowings


6,099,876



1,723,865







Total Current Liabilities


7,398,588



7,498,185







NONCURRENT LIABILITIES:






Deferred income


359,646



120,973

Total Noncurrent Liabilities


359,646



120,973







Total Liabilities


7,758,234



7,619,158







SHAREHOLDERS' EQUITY:






Common Stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 shares
    issued and outstanding at December 31, 2017 and 2016)


51,875



51,875

Additional paid-in capital


10,363,412



9,654,024

Retained earnings


30,287,658



27,074,624

Statutory reserves


3,762,288



3,762,288

Accumulated other comprehensive income (loss)


706,628



(1,966,708)







Total Shareholders' Equity


45,171,861



38,576,103







Total Liabilities and Shareholders' Equity

$

52,930,095


$

46,195,261

 

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)



For the Years Ended December 31,


2017


2016

REVENUES:




Revenues

$

17,634,466


$

22,581,267

Revenues - related parties


22,905,224



28,766,815







Total Revenues


40,539,690



51,348,082







COST OF REVENUES:






Cost of revenues


17,810,948



24,688,860

Cost of revenues - related parties


17,666,765



23,424,644







Total Cost of Revenues


35,477,713



48,113,504







GROSS PROFIT


5,061,977



3,234,578







OPERATING EXPENSES:






Selling


86,633



34,828

General and administrative


1,650,690



1,078,392







Total Operating Expenses


1,737,323



1,113,220







INCOME FROM OPERATIONS


3,324,654



2,121,358







OTHER INCOME (EXPENSES):






Interest expense


(225,023)



(140,844)

Other income (expense)


(33,961)



3,853

Exchange gains


147,978



40,533







Total Other Expenses


(111,006)



(96,458)







INCOME BEFORE PROVISION FOR INCOME TAXES


3,213,648



2,024,900

PROVISION FOR INCOME TAXES


(614)



(18,009)

NET INCOME

$

3,213,034


$

2,006,891







COMPREHENSIVE INCOME (LOSS):






NET INCOME

$

3,213,034


$

2,006,891

OTHER COMPREHENSIVE INCOME (LOSS):






Foreign currency translation adjustment


2,673,336



(2,632,390)







COMPREHENSIVE INCOME (LOSS)

$

5,886,370


$

(625,499)







NET INCOME PER COMMON SHARE:






Basic

$

0.06


$

0.04

Diluted

$

0.06


$

0.04

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:






Basic


51,875,000



51,875,000

Diluted


53,934,497



51,875,000

 

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS



For the Years Ended

December 31,


2017


2016

CASH FLOWS FROM OPERATING ACTIVITIES:




Net income

$

3,213,034


$

2,006,891

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






Depreciation


67,790



112,282

Amortization of land use rights and yew forest assets


3,678,972



8,819,008

Stock-based compensation


709,388



31,466

Inventory write-down


-



2,499,563

Changes in operating assets and liabilities:






Accounts receivable


5,349,595



(11,345,374)

Accounts receivable - related parties


(13,903,716)



(915,034)

Prepaid and other current assets


40,202



(13,435)

Prepaid expenses - related parties


23,055



23,440

Inventories, net


850,356



(4,080,175)

VAT recoverables


1,537,471



(1,047,212)

Accounts payable


(2,325,337)



2,807,954

Accounts payable - related parties


(607,503)



626,557

Accrued expenses and other payables


(195,047)



362,600

Due to related parties


(58,417)



9,635

Note payable


(1,210,833)



615,408

Deferred income


221,992



126,392

Taxes payable


(11,271)



3,065







NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES


(2,620,269)



643,031







CASH FLOWS FROM INVESTING ACTIVITIES:






Change in restricted cash


-



296,419

Purchase of property and equipment


-



(61,509)

Purchase of land use rights and yew forest assets


(799,070)



-







NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES


(799,070)



234,910







CASH FLOWS FROM FINANCING ACTIVITIES:






Proceeds from short-term borrowings


10,940,220



1,809,189

Repayments of short-term borrowings


(6,844,634)



(3,022,055)

Proceeds from related party


-



81

Repayments to related parties


(170,875)



(49,030)







NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES


3,924,711



(1,261,815)







EFFECT OF EXCHANGE RATE ON CASH


75,467



(18,743)







NET INCREASE (DECREASE) IN CASH


580,839



(402,617)







CASH - Beginning of the year


278,991



681,608







CASH - End of the year

$

859,830


$

278,991







SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:






Cash paid for:






Interest

$

189,403


$

145,452

Income taxes

$

18,328


$

24,451







NON-CASH INVESTING AND FINANCING ACTIVITIES






Operating expense paid by related party

$

38,140


$

88,088

Property and equipment paid by related party

$

-


$

82,491

Settlement of due to related party with property and equipment

$

82,491


$

-

Reclassification of inventories to land use rights and yew forest assets

$

4,331,025


$

-

 

Cision View original content:http://www.prnewswire.com/news-releases/yew-bio-pharm-group-reports-2017-fourth-quarter-and-full-year-financial-results-300622709.html

Source: Yew Bio-Pharm Group, Inc.
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