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.