Tiens Biotech Group (USA) Reports First Quarter Results

16 May, 2011, 17:15 ET from Tiens Biotech Group (USA), Inc.

TIANJIN, China, May 16, 2011 /PRNewswire-Asia/ -- Tiens Biotech Group (USA), Inc. (the "Company" or "Tiens", NYSE AMEX: TBV), www.tiens-bio.com, 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 quarter ended March 31, 2011.

Revenue for the first quarter of 2011 was $13.1 million, compared to $11.4 million for 2010.  

Net income for first quarter of 2011 was $2.9 million, or $0.04 per share, compared to $3.6 million, or $0.05 per share for 2010.

The 14.4% increase in revenue for the first quarter of 2011 mainly resulted from a 21.2% increase in domestic sales as compared to the year-ago period. There were two primary reasons for the robustness of the domestic market. First, distributors rushed to increase inventory in advance of the planned price increases for some products that were scheduled for March 2011. Additionally, Tiens began to see the effects of the long-awaited direct selling license that was awarded by the Ministry of Commerce of the People's Republic of China on March 11, 2011.  On the international front, Tiens experienced a modest 4.6% increase as a result of increased sales to South Africa.

Net income, however, was negatively impacted by an increase of $1.4 million in selling, general and administrative expenses. This increase was primarily responsible for the 18.3% decrease in net income for the quarter and was mainly due to increases in depreciation related to the transfer of construction in progress to fixed assets.

Other Highlights

Cost of sales were $4.1 million in 2011 compared to $3.4 million in 2010, an increase of 20.2%. This increase was primarily due to the corresponding increase in sales. However, cost of sales rose at a higher rate than sales overall, as a result of a reduction in sales of the Company's higher margin products.  

Gross profit increased by 11.9% to $8.9 million in 2011, compared to $8.0 million in 2010. The gross profit margin for 2011 was 68.3% compared to 69.8% for the same period in 2010.

Selling, general and administrative expenses increased by 39.3% to $4.9 million in 2011, compared to $3.5 million in 2010. The increase was primarily due to the aforementioned increases in depreciation.

As of March 31, 2011, Tiens had $130.7 million of retained earnings and total shareholders' equity of $190.1 million.

Jinyuan Li, Chairman, President and CEO of Tiens, said, "We are pleased by the increase in sales this quarter and expect our new domestic selling license to be a growing contributor to revenue in the months and years ahead. In the international arena, we are confident that our operations will gradually improve as worldwide economic conditions continue to recover. Likewise, operational improvements made at the distributor level should also boost results over time.  Our commitment to both domestic and international growth remains steadfast as we continue to manage our business through the economic recovery and look ahead toward further execution of our strategic growth plans in both China and abroad."

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.

CONTACT:

Investor Relations

Debra Berliner

Tiens Biotech Group (USA), Inc.

G. S. Schwartz & Co.

Tel:   +86-22-8213-3118

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

-Tables Follow-

TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED)

Three months ended March 31,

2011

2010

REVENUE-RELATED PARTIES

$        13,050,225

$        11,403,363

COST OF SALES-RELATED PARTIES

4,136,399

3,440,881

GROSS PROFIT

8,913,826

7,962,482

SELLING, GENERAL AND ADMINISTRATIVE EXPENSES

4,870,886

3,497,547

INCOME FROM OPERATIONS

4,042,940

4,464,935

    Interest expense

(131,636)

-

    Interest income

7,992

1,872

    Other expense

(529,185)

(253,710)

OTHER EXPENSE, NET

(652,829)

(251,838)

INCOME BEFORE PROVISION FOR INCOME TAXES

3,390,111

4,213,097

PROVISION FOR INCOME TAXES

446,299

609,502

NET INCOME

2,943,812

3,603,595

       LESS: Net income attributable to the noncontrolling interest

(190,204)

(342,057)

NET INCOME ATTRIBUTABLE TO THE COMPANY

2,753,608

3,261,538

OTHER COMPREHENSIVE INCOME:

    Foreign currency translation adjustment

1,012,022

14,970

COMPREHENSIVE INCOME ATTRIBUTABLE

TO THE COMPANY

3,765,630

3,276,508

COMPREHENSIVE INCOME ATTRIBUTABLE

TO THE NONCONTROLLING INTEREST

257,361

343,398

COMPREHENSIVE INCOME

$         4,022,991

$         3,619,906

EARNINGS PER SHARE,

BASIC AND DILUTED

$ 0.04

$ 0.05

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 MARCH 31, 2011 (UNAUDITED) AND DECEMBER 31, 2010 (AUDITED)

March 31,

December 31,

2011

2010

(Unaudited)

(Audited)

ASSETS

CURRENT ASSETS:

  Cash

$        9,691,411

$     10,155,522

  Accounts receivable, trade-related parties, net of

     allowance for doubtful accounts of $4,152,284 and $3,869,617

     as of March 31, 2011 and December 31, 2010, respectively

11,279,779

10,012,861

  Inventories

6,801,856

5,703,349

  Other receivables

942,959

1,045,952

  Other receivables-related parties

17,327,387

17,376,522

  Employee advances

127,314

170,842

  Prepaid expenses, net

356,817

415,208

  Prepaid taxes

3,689,268

3,646,140

     Total current assets

50,216,791

48,526,396

PROPERTY, PLANT AND EQUIPMENT, net

72,098,917

72,037,542

OTHER ASSETS:

  Construction in progress

130,736,007

128,715,283

  Construction deposits

20,177,749

12,490,855

  Intangible assets, net

12,991,801

12,987,000

  Other assets

10,302,761

10,721,040

     Total other assets

174,208,318

164,914,178

        Total assets

$    296,524,026

$    285,478,116

LIABILITIES AND SHAREHOLDERS' EQUITY

CURRENT LIABILITIES:

  Accounts payable

$      14,719,467

$      14,120,791

  Advances from customers-related parties

7,546,016

8,688,877

  Wages and benefits payable

1,584,986

1,613,782

  Short-term debt

7,610,000

3,024,800

  Income taxes payable

717,129

490,782

  Contractor deposits

195,485

209,376

  Contractor payables

26,888,982

28,134,711

  Other payables

1,109,025

1,113,416

  Other payables-related parties

5,337,033

1,417,516

     Total current liabilities

65,708,123

58,814,051

NON-CURRENT LIABILITIES

  Long term debt

18,568,400

18,451,280

  Deferred income

11,400,523

11,473,853

     Total non current liabilities

29,968,923

29,925,133

     Total liabilities

95,677,046

88,739,184

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

18,428,796

18,349,908

     Statutory reserves

16,465,144

16,465,144

     Retained earnings

130,711,559

127,957,951

     Accumulated other comprehensive income

24,405,648

23,393,626

        Total shareholders' equity of the Company

190,082,481

186,237,963

     Noncontrolling interest

10,764,499

10,500,969

     Total equity

200,846,980

196,738,932

        Total liabilities and equity

$     296,524,026

$     285,478,116

The accompanying notes are an integral part of this statement.

TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

FOR THE THREE MONTHS ENDED MARCH 31, 2011 AND 2010 (UNAUDITED)

Three months ended March 31,

2011

2010

CASH FLOWS FROM OPERATING ACTIVITIES:

  Net income  

$       2,943,812

$      3,603,595

  Adjustments to reconcile net income to cash

     provided by (used in) operating activities:

        Deferred income

(145,776)

-

        Provision for doubtful accounts

257,427

202,247

        Depreciation

1,117,611

417,469

        Amortization

85,020

83,557

        loss on assets written off

655,611

-

        Gain on sale of assets

-

(15,082)

        Rental expense borne by a related party

84,834

81,749

      (Increase) decrease in assets:

        Accounts receivable, trade-related parties

(1,457,625)

4,933,543

        Other receivables

109,344

93,577

        Other receivables-related parties

141,586

(1,200,159)

        Inventories

(1,050,293)

304,560

        Employee advances

44,495

13,935

        Prepaid expense

60,774

64,017

     Increase (decrease) in liabilities:

        Accounts payable

500,706

(819,926)

        Advances from customers-related parties

(1,194,866)

4,034,448

        Wages and benefits payable

(38,897)

(416,798)

        Other taxes payable

202,713

550,140

        Other payables

(11,159)

19,487

        Other payables-related parties

3,900,777

1,079,414

           Net cash provided by operating activities

6,206,094

13,029,773

CASH FLOWS FROM INVESTING ACTIVITIES:

  Investment in Life Resources

-

3,000,000

  Proceeds from disposal of a subsidiary

-

700,000

  Construction deposits

(7,783,013)

(562,642)

  Contractor deposits

(15,180)

-

  Addition to construction in progress

(2,729,380)

(9,112,590)

  Equipment deposits

(427,179)

(1,558,192)

  Proceeds from sales of properties

-

2,621,021

  Purchase of equipment and automobiles

(163,060)

(88,505)

           Net cash used in investing activities

(11,117,812)

(5,000,908)

CASH FLOWS FROM FINANCING ACTIVITIES:

  Proceed from short term debt

4,554,000

-

           Net cash provided by financing activities

4,554,000

-

EFFECT OF EXCHANGE RATE CHANGES ON CASH

(106,393)

(3,895)

NET INCREASE (DECREASE) IN CASH

(464,111)

8,024,970

CASH, beginning of period

10,155,522

1,848,328

CASH, end of period

$      9 ,691,411

$      9,873,298

Supplemental disclosures of cash flow information

  Cash paid during the period for:

     Interest

$          342,018

$                     -

     Income taxes

$          223,653

$         213,625

The accompanying notes are an integral part of this statement.

REVENUE BY REGION

Three months ended March 31,

2011

2010

China

$         8,218,691

$        6,783,273

International

4,831,534

4,620,090

Total

$       13,050,225

$      11,403,363

SOURCE Tiens Biotech Group (USA), Inc.



RELATED LINKS

http://www.tiens-bio.com