TIANJIN, China March 31, 2011 /PRNewswire-Asia/ -- Tiens Biotech Group (USA), Inc. , a companydedicated to the research, development, manufacturing, and marketing of nutrition supplement products, including wellness products and dietary supplements, todayannounced 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 increasedby 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. 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
Tiens Biotech Group (USA), Inc.
Web site: http://www.tiens-bio.com/
