Yew Bio-Pharm Group Reports 2015 Second Quarter Financial Results

Aug 18, 2015, 08:00 ET from Yew Bio-Pharm Group, Inc.

HARBIN, China, Aug. 18, 2015 /PRNewswire/ -- Yew Bio-Pharm Group, Inc. ("Yew Bio" or the "Company") (YEWB), a major grower and seller of yew trees, yew raw materials used in the manufacture of traditional Chinese medicine and products made from yew timber in China, today reported financial results for three- and six-months ended June 30, 2015.

2015 Second Quarter Results         


Three Months Ended June 30,

Percentage


2015

2014

Change

Revenues:




TCM Raw Materials

$3,909,313

$1,150,855

240%

Yew Trees

344,919

872,437

(60)%

Wood ear mushroom

405,484

-

100%

    Handicrafts

7,206

40,325

(82)%

Total Revenues

$4,666,922

$2,063,527

126%

 

Total revenues for the second quarter of 2015 increased 126% to $4.7 million from $2.1 million a year ago. Sales of TCM raw materials amounted to 83.8% of total revenues; sales of yew trees amounted to 7.4% of total revenues; sales of wood ear mushroom amounted to 8.7% of total revenues; and sales of handicrafts made up the remaining 0.1%.

For the 2015 second quarter, gross profit was $2.4 million, or 51% of total revenues, compared with $1.6 million, or 79.4% of total revenues for the comparable 2014 quarter. The decrease in the gross profit margin was primarily attributable to the lower gross margin yield of wood ear mushroom segment, and a one-time yew tree extracts sales occurred in June, 2015.

Operating expenses increased 119% to $484,475 for the quarter ended June 30, 2015, from $221,022 in the year-ago quarter. The increasing was primarily attributable to the increases in compensation and related benefits and other expenses.

Net income for the three months ended June 30, 2015 increased 41% to $2,005,656 from $1.4 million in the same quarter last year due to the increases of total revenues. Earnings per diluted share for the three months ended June 30, 2015 was $0.03, in line with the same period last year.

Six Month 2015 Financial Results


Six Months Ended June 30,

Percentage


2015

2014

Change

Revenues:




TCM Raw Materials

$4,866,320

$2,194,785

122%

Yew Trees

1,043,671

1,836,743

(43)%

Wood ear mushroom

1,304,672

-

100%

    Handicrafts

94,714

100,016

(5)%

Total Revenues

$7,309,377

$4,131,544

77%

 

Total revenues for the first six months of 2015 increased to $7.3 million from $4.1 million a year ago. Sales of TCM raw materials amounted to 66.6% of total revenues; sales of yew trees amounted to 14.3% of total revenues; sales of wood ear mushroom amounted to 17.8% of total revenues; and sales of handicrafts made up the remaining 1.3%.

Gross profit was $3.9 million, or 52.7% of total revenues, compared with $3.2 million, or 77.0% of total revenues for the comparable 2014 quarter. The decrease in the gross profit margin was primarily attributable to the lower gross margin yield of wood ear mushroom segment, and the one-time yew tree extracts sales occurred in June, 2015

Operating expenses increased 146% to $956,541 for the six months ended June 30, 2015, from $388,418 for the same period last year. The increasing was primarily attributable to the increases in compensation and related benefits and other expenses.

Net income for the first six months of 2015 increased 6% to $3.0 million from $2.8 million for the same period last year. Earnings per diluted share were $0.05, compared to $0.04 for the same period last year.

At June 30, 2015 the company had approximately $610,000 in cash and $3.2 million in accounts receivable.

"Revenue for the quarter increased 126% compared to last year due to the sales increases in TCM raw materials and wood ear mushroom segments which offset the decrease of Yew tree sales," said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group, Inc. " Wood ear mushroom sales contributed a large proportion for the Company's revenues in the past half year, and we expect to develop more customer resources and expand our wood ear mushroom sales in the next half of 2015."

"Our TCM raw materials sales increased sharply in the second quarter of 2015 which was mainly due to the increase in demand from our related party, Yew Pharmaceutical. Yew Pharmaceutical has developed a new technology to extract yew essence oil from TCM raw materials and further processing the oil to be used as the base of a new product, Yew Candle. The development of Yew Candle had led to the increase in demand of TCM raw materials. Sales of Yew Candle would begin in early October this year, and we expect our TCM raw materials sales will continue to increase."

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.

Investor Relations Contacts:
Cami Xue
Chineseinvestors.com, Inc.
Tel: (800) 958-8561
Cami@chinesefn.com

 

(financial tables follow)

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS










June 30,
2015



December 31,
2014




(Unaudited)





ASSETS

CURRENT ASSETS:







Cash


$

610,658



$

487,940


Accounts receivable



2,236,486




922,564


Accounts receivable - related party



975,562




340,132


Inventories



3,509,414




1,443,078


Prepaid expenses - related party



126,731




5,787


Prepaid expenses and other assets



2,003,906




16,791











Total Current Assets



9,462,757




3,216,292











LONG-TERM ASSETS:









Long-term inventories, net



11,083,446




10,663,545


Property and equipment, net



795,544




856,250


Land use rights and yew forest assets, net



20,574,883




20,305,821











Total Long-term Assets



32,453,873




31,825,616











Total Assets


$

41,916,630



$

35,041,908











LIABILITIES AND SHAREHOLDERS' EQUITY


CURRENT LIABILITIES:









Accounts payable


$

427,165



$

-


Accrued expenses and other payables



268,141




84,722


Advances from customers



67,501




-


Taxes payable



16,444




10,547


Due to related parties



697,445




45,040


Short-term borrowings



1,642,360




-




















Total Current Liabilities



3,119,056




140,309











Total Liabilities



3,119,056




140,309











SHAREHOLDERS' EQUITY:









Common stock ($0.001 par value; 140,000,000 shares authorized; 52,125,000 shares

    issued and outstanding at June 30, 2015 and December 31, 2014)



52,125




52,125


Additional paid-in capital



9,108,038




8,557,656


Retained earnings



23,043,440




20,444,667


Statutory reserves



3,466,039




3,100,766


Accumulated other comprehensive income - foreign currency translation adjustment



3,127,932




2,746,385











Total Shareholders' Equity



38,797,574




34,901,599











Total Liabilities and Shareholders' Equity


$

41,916,630



$

35,041,908


 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)










For the Three Months Ended
June 30,



For the Six Months Ended
June 30,




2015



2014



2015



2014


REVENUES:













    Revenues


$

1,904,941



$

1,780,535



$

3,439,595



$

3,394,253


    Revenues - related party



2,761,981




283,032




3,869,782




737,291



















       Total Revenues



4,666,922




2,063,567




7,309,377




4,131,544



















COST OF REVENUES:

















    Cost of revenues



1,533,314




354,456




1,907,359




769,072


    Cost of revenues - related party



753,806




70,479




1,550,730




183,597



















       Total Cost of Revenues



2,287,120




424,935




3,458,089




952,669



















GROSS PROFIT



2,379,802




1,638,632




3,851,288




3,178,875



















OPERATING EXPENSES:

















    Selling



9,075




661




13,763




2,421


    General and administrative



475,400




220,361




942,778




385,997



















       Total Operating Expenses



484,475




221,022




956,541




388,418



















INCOME FROM OPERATIONS



1,895,327




1,417,610




2,894,747




2,790,457



















OTHER INCOME (EXPENSES):

















    Interest income (expense)



(18,546)




55




(18,421)




291


    Government grant



135,322




-




135,322




-


    Other income (expense)



(4,457)




(194)




(4,473)




1,964



















       Total Other Income (Expenses)



112,319




(139)




112,428




2,255



















INCOME BEFORE INCOME TAXES



2,007,646




1,417,471




3,007,175




2,792,712


PROVISION FOR INCOME TAXES



(1,990)




-




(43,129)




-


NET INCOME


$

2,005,656



$

1,417,471



$

2,964,046



$

2,792,712



















COMPREHENSIVE INCOME:

















    NET INCOME


$

2,005,656



$

1,417,471



$

2,964,046



$

2,792,712


    OTHER COMPREHENSIVE INCOME (LOSS):

















       Foreign currency translation adjustment



123,694




35,482




381,547




(222,486)



















    COMPREHENSIVE INCOME


$

2,129,350



$

1,452,953



$

3,345,593



$

2,570,226



















NET INCOME PER COMMON SHARE:

















    Basic


$

0.04



$

0.03



$

0.06



$

0.06


    Diluted


$

0.03



$

0.03



$

0.05



$

0.04


WEIGHTED AVERAGE COMMON SHARES

OUTSTANDING:

















    Basic



52,125,000




50,000,000




52,125,000




50,000,000


    Diluted



57,618,689




50,000,000




57,899,669




64,872,148


 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)







For the Six Months Ended
June 30,




2015



2014


CASH FLOWS FROM OPERATING ACTIVITIES:







Net income


$

2,964,046



$

2,792,712


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









Depreciation



76,099




91,862


Stock-based compensation



537,660




-


Stock issued for professional services



12,722




-


Amortization of land use rights and yew forest assets



256,333




255,678


Gain on disposal of property and equipment



-




(2,142)


Changes in operating assets and liabilities:









Accounts receivable



(1,300,729)




(911,790)


Accounts receivable - related party



(629,335)




237,626


Prepaid expenses and other current assets



(1,979,257)




(20,473)


Prepaid expenses - related party



(120,407)




-


Due from related parties



-




14,034


Inventories



(2,071,367)




358,413


Accounts payable



427,058




42,398


Accrued expenses and other payables



182,092




(1,100)


Advances from customers



67,236




-


Taxes payable



5,789




(3,865)











NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES



(1,572,060)




2,853,353











CASH FLOWS FROM INVESTING ACTIVITIES:









Proceeds from disposal of property and equipment



-




5,000


Purchase of property and equipment



(7,000)




-


Payment for land use rights and yew forest assets



(588,928)




(3,755,629)











NET CASH USED IN INVESTING ACTIVITIES



(595,928)




(3,750,629)











CASH FLOWS FROM FINANCING ACTIVITIES:









Proceeds from short-term borrowings



1,642,360




-


Proceeds from related party advances



652,363




1,221


Repayments for related party advances



-




(25,674)











NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES



2,294,723




(24,453)











EFFECT OF EXCHANGE RATE ON CASH



(4,017)




(7,204)











NET INCREASE (DECREASE) IN CASH



122,718




(928,933)











CASH - Beginning of period



487,940




1,159,611











CASH - End of period


$

610,658



$

230,678











SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:









Cash paid for:









Interest


$

18,647



$

-


Income taxes


$

-



$

-











Non-cash investing and financing activities









Reclassification of yew forest assets to inventories


$

279,514



$

1,658


 

 

SOURCE Yew Bio-Pharm Group, Inc.