Tiens Biotech Group (USA) Reports 2010 Results

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.



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