NEW YORK, Nov. 15 /Xinhua-PRNewswire/ -- Tiens Biotech Group (USA),
Inc. ("the Company" or "Tiens"), (AMEX:TBV),
http://www.tiens-bio.com/ , announced financial results for the
third quarter ended September 30, 2007. Revenue for the third
quarter of 2007 was $11.0 million compared to $19.2 million for the
third quarter of 2006. Net income for the third quarter of 2007 was
$3.1 million, or $0.04 per share, compared to net income of $8.4
million, or $0.12 per share for the third quarter of 2006. Revenue
for the nine months ended September 30, 2007 was $41.6 million,
compared to $50.2 million for the nine months ended September 30,
2006. Net income for the nine months ended September 30, 2007 was
$14.7 million, or $0.21 per share, compared to $20.4 million, or
$0.29 per share for the same period in 2006. Revenue by Region For
the third quarter of 2007, revenue in China was $3.4 million
compared to $7.2 million for the third quarter of 2006. For the
nine months ended September 30, 2007, revenue in China was $15.7
million, compared to $20.3 million for the nine months ended
September 30, 2006. Revenue for the third quarter of 2006 benefited
from a special promotion conducted for distributors in China. No
similar promotion was held during the third quarter of 2007, which
contributed to the decrease in revenue for the period. Sales in
China were also negatively impacted by increased government and
media scrutiny on the direct selling industry, which the Company
intends to pursue through its distributor in China, particularly
following the enactment of the new direct selling regulations. For
the third quarter of 2007, international revenue was $7.6 million,
compared to $11.9 million for the third quarter of 2006. For the
nine months ended September 30, 2007, international revenue was
$25.8 million, compared to $29.9 million for the first nine months
of 2006. In August of 2007, the General Administration of Quality
Supervision, Inspection and Quarantine (AQSIQ) announced an ongoing
national campaign in China against unsafe food and substandard
products. The four-month special campaign against poor product
quality was launched in response to a series of safety issues
involving Chinese products worldwide. The campaign, which is
currently scheduled to run to the end of the year, set detailed
goals including the licensing of all food producers, monitoring of
agricultural wholesale markets in all cities, inspection of
suppliers of raw materials for exported products and assuring that
agricultural products be free of five types of strong pesticides.
As a result of this campaign by the AQSIQ, there has been a general
slow-down and backlog of export clearances for Chinese food
products, which has resulted in Tiens experiencing significant
delays in obtaining export clearance for its products, which are
sold to its international affiliates. These delays have resulted in
decreases in international revenues and several of Tiens'
international affiliates being unable to receive sufficient
quantities of products to meet their demand. However, to date, no
problems have been identified with any of Tiens' products. Other
Highlights Cost of sales for the third quarter of 2007 decreased to
$3.1 million, or 39%, compared to $5.1 million for the same period
in 2006. This decrease was primarily due to the corresponding
decrease in revenue. Cost of sales for the nine months ended
September 30, 2007 was $12.0 million, compared to $13.7 million for
the same period in 2006, a decrease of 12.7%. Gross profit for the
third quarter of 2007 was $7.9 million compared to $14.1 million
for the same period in 2006. The gross profit margin for the third
quarter of 2007 was 72.0%, compared to 73.6% for the same period in
2006. Gross profit for the nine months ended September 30, 2007 was
$29.6 million, compared to $36.5 million for the same period in
2006. The gross profit margin for the nine months ended September
30, 2007 was 71.2%, compared to 72.7% for the same period in 2006.
These decreases reflect reductions in revenue for the third quarter
and first nine months of 2007 and gross profit margins being lower
for semi-finished products than for the finished products that the
Company was still selling in 2006. Selling, general and
administrative expenses increased to $3.8 million for the third
quarter of 2007, compared to $2.8 million for the same period in
2006. The selling and administrative expense as a percentage of
sales was 34.5% for the third quarter of 2007 compared to 14.6% for
the same period in 2006. Selling, general and administrative
expenses were $10.4 million for the nine months ended September 30,
2007, compared to $8.6 million for the same period in 2006. The
selling and administrative expense as a percentage of sales was
24.9% for the nine months ended September 30, 2007 compared to
17.2% for the same period in 2006. The increase in expenses reflect
an increase in salary and depreciation expenses, and the increase
in expenses as a percentage of sales was also due to the
aforementioned decrease in sales. As of September 30, 2007, Tiens
had $110 million of retained earnings and total shareholders'
equity of $139 million. Jinyuan Li, Chairman, President and CEO of
Tiens, said, "The current quarter reflects the challenges of the
direct selling environment in China and exporting internationally.
While there has been a general slow-down and backlog of export
clearances for Chinese food items, we remain dedicated to
maintaining the high quality of our products which have met all
regulatory scrutiny. We will continue to strive to expand our
market share in China and further establish the Tiens brand
internationally." About Tiens Biotech Group (USA), Inc.
http://www.tiens-bio.com/ Tiens Biotech Group (USA), Inc.
(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 nutrition
supplement products, and personal care products. Tiens derives its
revenues principally from product sales to affiliated companies in
China and internationally in 63 countries. Since its establishment,
Tiens has developed and produced 35 nutrition supplements, which
include wellness products and dietary nutrition 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 105 branches.
Outside of China, Tiens sells its products to affiliated companies
in 63 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; (v) whether Tianshi
Engineering, the Company's affiliate which sells its products in
China, obtains a direct selling license in China; and (vi) 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/ under "Search for Company Filings." TIENS
BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS
OF INCOME AND OTHER COMPREHENSIVE INCOME FOR THE THREE MONTHS AND
NINE MONTHS ENDED SEPTEMBER 30, 2007 AND 2006 (Unaudited) Three
months ended Nine months ended September 30 September 30 2007 2006
2007 2006 REVENUE - RELATED PARTIES $11,027,478 $19,187,748
$41,584,749 $50,203,306 COST OF SALES 3,089,791 5,066,051
11,979,984 13,714,739 GROSS PROFIT 7,937,687 14,121,697 29,604,765
36,488,567 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 3,801,914
2,803,859 10,353,397 8,641,512 INCOME FROM OPERATIONS 4,135,773
11,317,838 19,251,368 27,847,055 OTHER INCOME, NET 149,683 164,104
1,044,290 127,458 INCOME BEFORE PROVISION FOR INCOME TAXES AND
MINORITY INTEREST 4,285,456 11,481,942 20,295,658 27,974,513
PROVISION FOR INCOME TAXES 344,248 878,931 1,610,653 2,188,491
INCOME BEFORE MINORITY INTEREST 3,941,208 10,603,011 18,685,005
25,786,022 MINORITY INTEREST 848,212 2,167,747 3,970,791 5,396,570
NET INCOME 3,092,996 8,435,264 14,714,214 20,389,452 OTHER
COMPREHENSIVE INCOME Foreign currency translation adjustment
1,593,144 1,411,012 4,930,487 2,396,799 COMPREHENSIVE INCOME
$4,686,140 $9,846,276 $19,644,701 $22,786,251 EARNINGS PER SHARE,
BASIC AND DILUTED $0.04 $0.12 $0.21 $0.29 WEIGHTED AVERAGE NUMBER
OF SHARES 71,333,586 71,333,586 71,333,586 71,333,586 TIENS BIOTECH
GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS
OF SEPTEMBER 30, 2007 AND DECEMBER 31, 2006 A S S E T S September
30, December 31, 2007 2006 (Unaudited) CURRENT ASSETS: Cash
$51,841,201 $54,270,065 Accounts receivable, trade - related
parties, net of allowance for doubtful accounts of $75,456 and
$86,776 as of September 30, 2007 and December 31, 2006,
respectively 15,015,659 12,926,670 Accounts receivable, trade -
third parties 18,817 18,135 Inventories 5,635,349 6,845,108 Other
receivables 568,693 349,905 Other receivables - related parties
18,573,926 8,397,227 Employee advances 85,716 111,121 Prepaid
expense 1,286,639 2,135,917 Loans receivable 3,497,238 3,223,809
Loans receivable - related party 27,714,328 25,640,000 Total
current assets 124,237,566 113,917,957 Property, PLANT AND
EQUIPMENT, net 34,205,418 30,511,319 OTHER ASSETS: Intangible
assets, net 3,061,331 510,183 Long-term prepaid expenses 1,629,810
3,807,539 Total other assets 4,691,141 4,317,722 Total assets
$163,134,125 $148,746,998 TIENS BIOTECH GROUP (USA), INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2007
AND DECEMBER 31, 2006 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 September 30, December 31, 2007 2006 (Unaudited)
CURRENT LIABILITIES: Accounts payable $2,954,969 $4,123,105
Advances from customers - related parties 1,564,869 1,570,120 Wages
and benefits payable 788,545 992,068 Other taxes payable 652,815
969,760 Other payables 630,328 500,213 Other payables - related
parties 252,728 522,105 Dividend payable to minority interest
256,583 238,311 Current portion of long term debt, related party
2,130,000 2,130,000 Total current liabilities 9,230,837 11,045,682
LONG TERM DEBT, net of current portion, related party 5,332,742
6,397,742 Total liabilities 14,563,579 17,443,424 MINORITY INTEREST
9,505,594 11,883,323 SHAREHOLDERS' EQUITY: Common stock, $0.001 par
value, 260,000,000 shares authorized, 71,333,586 issued and
outstanding, respectively 71,334 71,334 Paid-in-capital 8,842,009
8,842,009 Statutory reserves 9,420,783 9,420,783 Retained earnings
110,085,351 95,371,137 Accumulated other comprehensive income
10,645,475 5,714,988 Total shareholders' equity 139,064,952
119,420,251 Total liabilities and shareholders' equity $163,134,125
$148,746,998 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
REVENUE BY REGION (Unaudited) Three months ended September 30, 2007
2006 Change China $3,388,880 $7,240,485 -53.2% International
$7,638,589 $11,947,263 -36.1% Total $11,027,478 $19,187,748 -42.5%
Nine months ended September 30, 2007 2006 Change China $15,736,494
$20,281,510 -22.4% International $25,848,255 $29,921,796 -13.6%
Total $41,584,749 $50,203,306 -17.2% For more information, please
contact: Tiens Biotech Group (USA), Inc. Tel: +86-22-8213-7915 Fax:
+86-22-8213-7667 Email: Web: http://www.tiens-bio.com/ Carl Hymans
G. S. Schwartz & Co. Tel: +1-212-725-4500 Fax: +1-212-725-9188
Email: DATASOURCE: Tiens Biotech Group (USA), Inc. CONTACT: Tiens
Biotech Group (USA), Inc., +86-22-8213-7915, or fax, +86-
22-8213-7667, or ; or Carl Hymans of G. S. Schwartz & Co.,
+1-212-725-4500, or fax, +1-212-725-9188, or , for TIENS Web Site:
http://www.tiens-bio.com/
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