Tiens Biotech Group (USA) Reports 2010 Results

Mar 31, 2011, 17:30 ET from Tiens Biotech Group (USA), Inc.

TIANJIN, China March 31, 2011 /PRNewswire-Asia/ -- Tiens Biotech Group (USA), Inc. (the "Company" or "Tiens", NYSE AMEX: TBV), a company dedicated to the research, development, manufacturing, and marketing of nutrition supplement products, including wellness products and dietary supplements, today announced financial results for the year ended December 31, 2010.

For 2010, revenue was $41.3 million, compared to $62.0 million for 2009.  

Net income for 2010 was $4.8 million, or $0.07 per share, compared to $23.8 million, or $0.33 per share for 2009.

Results for 2010 mainly reflect a decrease in international sales.  For 2010, international revenue was $16.4 million, compared to $34.7 million for 2009.  In 2008, China's Administration of Quality Supervision, Inspection and Quarantine carried out a national campaign against unsafe food and substandard products, 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 for 2009.

In addition, Tiens' Indonesia affiliated company has not purchased from the Company during the year of 2010, given they purchased more products in 2009 after the 2008 product scarcity for the reason noted above. In addition, local Original Equipment Manufacturers in Indonesia have been producing healthcare products with the Company's semi-finished goods, which have a profit margin that is much lower than the profit margin of finished goods.

Tiens' affiliated companies in many regions have made certain adjustments to their marketing programs and reorganizations at their branch and higher levels, which are expected to boost sales performance over the long-run, but negatively affect short-term sales.

Other Highlights  

Cost of sales were $15.0 million in 2010 compared to $20.2 million in 2009, a decrease of 25.6%.  This 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 decreased by 37.0% to $26.3 million in 2010, compared to $41.8 million in 2009. The gross profit margin for 2010 was 63.7% compared to 67.5% in 2009.

Selling, general and administrative expenses increased by 22.0% to $19.5 million in 2010, compared to $16.0 million in 2009. The increase was primarily due to increases in allowance for bad debt ($1.9 million), salaries expenses ($0.7 million) and research & development expenses ($0.6 million).

As of December 31, 2010, Tiens had $128.0 million of retained earnings and total shareholders' equity of $285.5 million.

In addition, Tiens reported that on March 11, 2011, Tianjin Tianshi Biological Engineering Co., Ltd. (Tianshi Engineering) was awarded a direct selling license in Tianjin.

Jinyuan Li, Chairman, President and CEO of Tiens, said, "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.  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."

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 45 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 87 branches.  Outside of China, Tiens sells its products to affiliated companies in 45 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; 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.

-Tables Follow-

TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

FOR THE YEARS ENDED DECEMBER 31, 2010 and 2009

2010

2009

REVENUE - RELATED PARTIES

$

41,021,135

$

60,032,968

REVENUE - THIRD PARTIES

323,585

1,943,101

COST OF SALES - RELATED PARTIES

14,850,739

18,754,680

COST OF SALES - THIRD PARTIES

158,638

1,412,812

GROSS PROFIT    

26,335,343

41,808,577

SELLING, GENERAL AND  ADMINISTRATIVE EXPENSES        

19,530,501

16,009,382

INCOME FROM OPERATIONS

6,804,842

25,799,195

  Interest expense

(230,905)

(186,543)

  Interest income

18,362

301,709

  Other expense

35,965

(176,757)

OTHER EXPENSE, NET

(176,578)

(61,591)

INCOME BEFORE INCOME TAXES

6,628,264

25,737,604

INCOME TAXES

1,469,548

930,703

NET INCOME

5,158,716

24,806,901

   LESS: Net income attributable to the noncontrolling interest

(323,101)

(965,557)

NET INCOME ATTRIBUTABLE TO THE COMPANY

4,835,615

23,841,344

OTHER COMPREHENSIVE INCOME:

    Foreign currency translation adjustment

5,131,503

441,140

    Loss from the realization of foreign currency sale

-

(6,030,079)

COMPREHENSIVE INCOME ATTRIBUTABLE

TO THE COMPANY

9,967,118

18,252,405

COMPREHENSIVE INCOME ATTRIBUTABLE

TO THE NONCONTROLLING INTEREST

664,854

993,504

COMPREHENSIVE INCOME

$

10,631,972

$

19,245,909

EARNINGS PER SHARE,

BASIC AND DILUTED

$

0.07

$

0.33

WEIGHTED AVERAGE NUMBER OF SHARES,

BASIC AND DILUTED

71,333,586

71,333,586

The accompanying notes are an integral part of this statement.

TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

AS OF DECEMBER 31, 2010 AND DECEMBER 31, 2009

December 31,

December 31,

2010

2009

A S S E T S

CURRENT ASSETS:

Cash

$

10,155,522

$

1,848,328

Accounts receivable, trade - related parties, net of allowance for doubtful accounts of $3,869,617 and $1,419,178 as of December 31, 2010 and December 31, 2009 , respectively

10,012,861

15,379,312

Inventories

5,703,349

5,328,052

Other receivables

1,045,952

995,657

Other receivables - related parties

17,376,522

44,561,626

Employee advances

170,842

115,673

Prepaid expenses, net

415,208

658,193

Prepaid taxes

3,646,140

407,534

Total current assets

48,526,396

69,294,375

PROPERTY, PLANT AND EQUIPMENT, net

72,037,542

10,124,483

OTHER ASSETS:

Construction in progress

128,715,283

125,572,621

Construction deposits

12,490,855

1,405,997

Intangible assets, net

12,987,000

12,864,295

Other assets

10,721,040

11,847,937

Total other assets

164,914,178

151,690,850

Total assets

$

285,478,116

$

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

$

14,120,791

$

5,012,157

Advances from customers - related parties

8,688,877

4,426,751

Wages and benefits payable

1,613,782

1,484,852

Short-term debt

3,024,800

-

Income taxes payable

490,782

-

Contractor deposits

209,376

183,395

Contractor payables

28,134,711

18,513,216

Other payables

1,113,416

1,151,551

Other payables - related parties

1,417,516

3,326,110

Total current liabilities

58,814,051

34,098,032

NON-CURRENT LIABILITIES

Long term debt

18,451,280

-

Deferred income                                                                                                  

11,473,853

11,236,501

Total non current liabilities

29,925,133

11,236,501

Total liabilities

88,739,184

45,334,533

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

18,349,908

18,042,189

Statutory reserves

16,465,144

13,217,217

Retained earnings

127,957,951

126,370,263

Accumulated other comprehensive income

23,393,626

18,262,123

Total shareholders' equity of the Company

186,237,963

175,963,126

Noncontrolling interest

10,500,969

9,812,049

Total equity

196,738,932

185,775,175

Total liabilities and equity

$

285,478,116

$

231,109,708

The accompanying notes are an integral part of this statement.

TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009

2010

2009

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

5,158,716

$

24,806,901

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

Deferred income

(142,070)

-

Provision for doubtful accounts

2,349,703

406,795

Increase (decrease) provision for obsolete inventory

(237,632)

309,343

Depreciation

2,036,280

2,173,251

Amortization

338,019

381,742

Interest expense

167,586

4,761

(Gain) loss on sale of assets

(63,773)

47,054

Loss on assets written off

40,982

5,876

Rental expense borne by a related party

330,708

326,774

(Increase) decrease in assets:

Accounts receivable, trade - related parties

3,411,877

8,308,993

Other receivables

(16,036)

(184,540)

Other receivables - related parties

9,936,038

1,668,812

Inventories

93,315

2,761,335

Employee advances

(50,112)

(38,359)

Prepaid expense

258,945

(419,419)

Increase (decrease) in liabilities:

Accounts payable

8,742,972

(1,249,152)

Advances from customers - related parties

21,603,664

1,178,463

Wages and benefits payable

76,914

(43,279)

Other taxes payable

(2,674,295)

968,294

Other payables

(74,068)

(650,296)

Other payables - related parties

9,069,853

3,107,699

Net cash provided by operating activities

60,357,586

43,871,048

CASH FLOWS FROM INVESTING ACTIVITIES:

Cash outflow arising from disposal of a subsidiary

-

(23,975,473)

Collections from loans to local government

-

105,229

Construction deposits

(11,248,302)

(2,664,741)

Contractor deposits

19,306

19,734

Addition to construction in progress

(54,487,459)

(42,734,161)

Equipment deposits

(6,102,039)

(11,782,984)

Proceeds from sales of properties

73,650

29,131

Purchase of equipment and automobiles

(1,441,906)

(2,009,536)

Net cash used in investing activities

(73,186,750)

(83,012,801)

CASH FLOWS FROM FINANCING ACTIVITIES:

Loan from (repayment to) related parties

-

(3,946,860)

Proceed from short term debt

2,958,800

-

Proceeds from long term debt

18,048,680

-

Net cash provided by (used in) financing activities

21,007,480

(3,946,860)

EFFECT OF EXCHANGE RATE CHANGES ON CASH

128,878

82,430

INCREASE (DECREASE) IN CASH

8,307,194

(43,006,183)

CASH, beginning of period

1,848,328

44,854,511

CASH, end of period

$

10,155,522

$

1,848,328

Supplemental disclosures of cash flow information

Cash paid during the period for:

Interest

$

217,154

$

105,817

Income taxes

$

1,489,417

$

3,287,531

The accompanying notes are an integral part of this statement.

TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

REVENUE BY REGION

Twelve months ended

December 31,

    2010

    2009

Change

China  

$24,894,472

$27,241,333

          - 8.6%

International

$   16,450,248

$   34,734,736

          -52.6%

Total

$41,344,720

$61,976,069  

          -33.3%

CONTACT:

Investor Relations

Debra Berliner

Tiens Biotech Group (USA), Inc.

G. S. Schwartz & Co.

Tel:   +86-22-8213-7335

Tel:  212-725-4500

Fax:  +86-22-8213-7914

Fax: 212-725-9188

Email: investor@tiens-bio.com

Email: dberliner@schwartz.com

http://www.tiens-bio.com

SOURCE Tiens Biotech Group (USA), Inc.



RELATED LINKS

http://www.tiens-bio.com