Attached files
| file | filename |
|---|---|
| 8-K - TIENS BIOTECH GROUP USA INC | v194684_8k.htm |
FOR
IMMEDIATE RELEASE
CONTACT:
|
Investor
Relations
|
Carl
Hymans
|
|
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:
carlh@schwartz.com
|
|
http://www.tiens-bio.com
|
TIENS
BIOTECH GROUP (USA) REPORTS SECOND QUARTER AND
SIX-MONTH RESULTS
NEW YORK
– August 19, 2010 –Tiens Biotech Group (USA), Inc. (the “Company” or
“Tiens”, NYSE AMEX: TBV), 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. 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 ADMINISTRATIVE 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 ATTRIBUTABLE
|
||||||||||||||||
|
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 | % | ||||||