Yew Bio-Pharm Group Reports 2018 First Quarter Financial Results

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May 15, 2018, 04:10 ET

EL MONTE, Calif., May 15, 2018 /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, handicraft products made from yew timber and yew candle and soap made with yew essential oil in China, today reported financial results for the three months ended March 31, 2018.

2018 First Quarter Results

	Three Months Ended March 31,		Percentage
	2018	2017	Change
Revenues:
TCM Raw Materials	$1,695,397	$2,534,261	(33.10)%
Handicrafts	1,102	1,361	(19.03)%
Others	1,334,639	5,339,842	(75.01)%
Total Revenues	$3,031,138	$7,875,464	(61.51)%

Total revenues for the first quarter of 2018 decreased 61.51% to $3.0 million from $7.9 million a year ago. Sales of TCM raw materials amounted to 55.93% of total revenues; sales of handicrafts amounted to 0.04 % of total revenues and sales of "Others" segment consisting with yew essential oil candle, yew essential oil soap, pine needle extract, complex Taxus Cuspidate and composite northeast yew extract amounted to 44.03% of total revenues.

For the 2018 first quarter, gross profit was $479,295, or 15.81% of total revenues, compared with $519,980, or 6.60% of total revenues for the comparable 2017 quarter. The increase in the overall gross profit margin were primarily attributable to the higher gross margin yields of TCM raw materials and "Others" segments.

Operating expenses decreased 12.91% to $259,872 for the quarter ended March 31, 2018, from $298,403 in the year-ago quarter. The decreasing was primarily attributable to the decrease in stock-based compensation.

Net income for the three months ended March 31, 2018 decreased 12.30% to $149,006 from $169,904 in the same quarter last year due to the decrease in overall total revenues. Earnings per diluted share for the three months ended March 31, 2018 was $0.00 as compared to $0.00 for the same period last year.

"Our business strategies are mainly focused on TCM raw materials and Others segments at present." said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group. "The overall total revenues of the first quarter 2018 was decreased as compared with the same quarter of last, which was mainly attributable to the market demand decreasing. Meanwhile, we are also developing different functional products which contain our yew materials. We hope these upcoming products will enrich our product mix and attract different target consumers."

"On May 11th, we established our second retail location at Arcadia, California. The location is positioned at a very famous shopping center of southern California, Westfield Santa Anita. We set up this location to target high-end customers, as well as to promote our yew related products. We believe this newly added location will benefit our U.S. customer base, and also contribute to the revenue of the company."

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.

(financial tables follow)

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS

	March 31, 2018		December 31, 2017
	(Unaudited)
ASSETS
CURRENT ASSETS:
Cash	$	23,050	$	859,830
Accounts receivable		5,697,334		9,881,914
Accounts receivable - related parties		15,745,123		21,847,733
Inventories, net		3,556,517		2,579,190
Prepaid expenses - related parties		52,398		57,202
Prepaid expenses and other assets		46,750		37,519
VAT recoverables		409,193		170,564
Total Current Assets		25,530,365		35,433,952

LONG-TERM ASSETS:
Long-term prepaid expenses		2,054,075		-
Long-term prepaid expenses – related parties		6,288,335		-
Long-term inventories, net		9,972,685		10,546,648
Property and equipment, net		584,479		579,557
Land use rights and yew forest assets, net		10,044,818		6,369,938

Total Long-term Assets		28,944,392		17,496,143

Total Assets	$	54,474,757	$	52,930,095

LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable	$	173,962	$	152,812
Accounts payable - related parties		-		357,708
Accrued expenses and other payables		198,713		162,619
Taxes payable		5,513		5,574
Due to related parties		589,193		619,999
Short-term borrowings		6,254,612		6,099,876

Total Current Liabilities		7,221,993		7,398,588

NONCURRENT LIABILITIES:
Deferred income		372,600		359,646
Total Noncurrent Liabilities		372,600		359,646

Total Liabilities		7,594,593		7,758,234

SHAREHOLDERS' EQUITY:
Common Stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 shares issued and outstanding at March 31, 2018 and December 31, 2017)		51,875		51,875
Additional paid-in capital		10,365,905		10,363,412
Retained earnings		30,436,664		30,287,658
Statutory reserves		3,762,288		3,762,288
Accumulated other comprehensive income - foreign currency translation adjustment		2,263,432		706,628

Total Shareholders' Equity		46,880,164		45,171,861

Total Liabilities and Shareholders' Equity	$	54,474,757	$	52,930,095

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED)

	For the Three Months Ended March 31,
	2018		2017
REVENUES:
Revenues	$	32,258	$	5,341,203
Revenues - related parties		2,998,880		2,534,261

Total Revenues		3,031,138		7,875,464

COST OF REVENUES:
Cost of revenues		12,906		5,301,216
Cost of revenues - related parties		2,538,937		2,054,268

Total Cost of Revenues		2,551,843		7,355,484

GROSS PROFIT		479,295		519,980

OPERATING EXPENSES:
Selling expense		840		265
General and administrative expense		259,032		298,138

Total Operating Expenses		259,872		298,403

INCOME FROM OPERATIONS		219,423		221,577

OTHER INCOME (EXPENSES):
Interest expense		(68,033)		(51,963)
Other income		87,303		290
Exchange loss		(89,687)		-

Total Other Expenses		(70,417)		(51,673)

INCOME BEFORE PROVISION FOR INCOME TAXES		149,006		169,904
PROVISION FOR INCOME TAXES		-		-
NET INCOME	$	149,006	$	169,904

COMPREHENSIVE INCOME:
NET INCOME	$	149,006	$	169,904
OTHER COMPREHENSIVE INCOME:
Foreign currency translation adjustment		1,556,804		303,880

COMPREHENSIVE INCOME	$	1,705,810	$	473,784

NET INCOME PER COMMON SHARE:
Basic	$	0.00	$	0.00
Diluted	$	0.00	$	0.00
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
Basic		51,875,000		51,875,000
Diluted		60,084,530		56,670,931

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)

	For the Three Months Ended March 31,
	2018		2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	149,006	$	169,904
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Depreciation		15,552		23,220
Amortization of land use rights and yew forest assets		65,810		30,778
Stock-based compensation		2,493		49,757

Changes in operating assets and liabilities:
Accounts receivable		4,484,508		(1,770,317)
Accounts receivable - related parties		6,806,716		(1,080,518)
Prepaid expenses and other current assets		(8,169)		16,129
Prepaid expenses - related parties		6,782		5,896
Inventories, net		(19,387)		1,542,136
VAT recoverables		(229,692)		417,200
Accounts payable		20,529		(143,092)
Accounts payable - related parties		(366,137)		(1,765,033)
Accrued expenses and other payables		33,020		(107,982)
Due to related parties		(38,950)		11,880
Taxes payable		(61)		(11,760)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES		10,922,020		(2,611,802)

CASH FLOWS FROM INVESTING ACTIVITIES:
Prepayments made for purchase of yew forest assets		(2,029,387)		-
Prepayments made to related parties for purchase of yew forest assets		(6,212,755)		-
Purchase of land use rights and yew forest assets		(3,471,401)		-

NET CASH USED IN INVESTING ACTIVITIES		(11,713,543)		-

CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings		1,520,000		2,880,000
Repayment of short-term borrowings		(1,320,000)		-
Repayments to related party		-		(20,000)

NET CASH PROVIDED BY FINANCING ACTIVITIES		200,000		2,860,000

EFFECT OF EXCHANGE RATE ON CASH		(245,257)		(6,402)

NET INCREASE (DECREASE) IN CASH		(836,780)		241,796

CASH - Beginning of period		859,830		278,991

CASH - End of period	$	23,050	$	520,787

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for:
Interest	$	50,809	$	25,368
Income taxes	$	-	$	-
NON-CASH INVESTING AND FINANCING ACTIVITIES
Operating expense paid by related party	$	3,146	$	9,927