NEW YORK, March 28 /Xinhua-PRNewswire/ -- Tiens Biotech Group
(USA), Inc. ("the Company" or "Tiens"), (AMEX:TBV),
http://www.tiens-bio.com/ , announced financial results for the
fourth quarter and twelve months ended December 31, 2007. Revenue
for the fourth quarter of 2007 was $13.3 million compared to $16.6
million for the fourth quarter of 2006. Net income for the fourth
quarter of 2007 was $3.9 million, or $0.05 per share, compared to
net income of $5.9 million, or $0.08 per share for the fourth
quarter of 2006. Revenue for the twelve months ended December 31,
2007 was $54.9 million, compared to $66.8 million for the twelve
months ended December 31, 2006. Net income for the twelve months
ended December 31, 2007 was $18.6 million, or $0.26 per share,
compared to $26.3 million, or $0.37 per share for the twelve months
ended December 31, 2006. Revenue by Region For the fourth quarter
of 2007, revenue in China was $6.7 million compared to $6.8 million
for the fourth quarter of 2006. For the twelve months ended
December 31, 2007, revenue in China was $22.5 million, compared to
$27.1 million for the twelve months ended December 31, 2006.
Revenue for 2006 benefited from a special promotion conducted in
the third quarter of the year for distributors in China, which
increased sales. No similar promotion was held during 2007, which
contributed to the decrease in revenue for the period. In addition,
the application for a direct selling license in China is still
pending. Until the application is approved, Tianshi Engineering
will continue to sell Tiens' products through its branches,
affiliated companies and chain stores in China. For the fourth
quarter of 2007, international revenue was $6.6 million, compared
to $9.8 million for the fourth quarter of 2006. For the twelve
months ended December 31, 2007, international revenue was $32.4
million, compared to $39.7 million for the comparable period of
2006. This decrease mainly reflects a general sales weakness,
particularly to countries in Africa during the second quarter of
2007. International sales were also impacted by the General
Administration of Quality Supervision, Inspection and Quarantine's
(AQSIQ) announcement in August 2007 of an ongoing national campaign
in China against unsafe food and substandard products. As a result
of this campaign by the AQSIQ, there has been a general slow-down
in international sales and several of Tiens' international
affiliates being unable to receive sufficient quantities of
products to meet their demand. However, it is important to note
that to date, no problems have been identified with any of Tiens'
products. The campaign, which was originally scheduled to finish at
the end of 2007, is currently scheduled to continue throughout
2008. In December 2007, Tiens entered into an agreement to acquire
Tianjin Tiens Life Resources Co., Ltd. (Life Resources), a company
which is currently constructing research and development,
manufacturing and logistic facilities, as well as administrative
offices totaling approximately 420,000 square meters in Tianjin,
China. The facilities are located 7 kilometers from Tiens' current
headquarters in Tianjin. The acquisition closed on March 13, 2008.
Tiens estimates that the budget for completion of the Life
Resources project will be approximately $220 million, including $64
million already paid to acquire all of the registered share capital
of Life Resources. The Company plans to move its headquarters to
these new facilities upon completion. Tiens has developed and
produces 33 nutrition supplement products, which include wellness
products and dietary nutrition supplements. During 2007, the
Company phased out production of its personal care line of
products, which had not been a material part of its business, to
focus on its wellness products and dietary supplements which offer
greater future opportunities. Other Highlights Cost of sales for
the fourth quarter of 2007 was $4.5 million, compared to $4.4
million for the fourth quarter of 2006. Cost of sales for the
twelve months ended December 31, 2007 was $16.5 million, compared
to $18.1 million for the same period in 2006. This decrease was
primarily due to the corresponding decrease in sales revenue. Cost
of sales decreased at a lesser rate than revenue because the cost
of raw materials increased during 2007 while the Company's product
prices remained unchanged. Gross profit for the fourth quarter of
2007 was $8.8 million compared to $12.2 million for the fourth
quarter of 2006. The gross profit margin for the fourth quarter of
2007 was 65.9%, compared to 73.7% for the same period in 2006.
Gross profit for the twelve months ended December 31, 2007 was
$38.4 million, compared to $48.7 million for the same period in
2006. The gross profit margin for the twelve months ended December
31, 2007 was 69.9%, compared to 72.9% for the same period in 2006.
These decreases reflect the reductions in revenue for the fourth
quarter and twelve months of 2007 and gross profit margins being
lower for semi-finished products than for the finished products
that the Company was selling in 2006. Selling, general and
administrative expenses were $4.0 million for the fourth quarter of
2007, compared to $4.1 million for the fourth quarter of 2006. The
selling and administrative expense as a percentage of sales was
29.7% for the fourth quarter of 2007 compared to 25.0% for the
fourth quarter of 2006. Selling, general and administrative
expenses were $14.3 million for the twelve months ended December
31, 2007, compared to $12.8 million for the comparable period in
2006. The selling and administrative expense as a percentage of
sales was 26.1% for the twelve months ended December 31, 2007
compared to 19.1% for the same period in 2006, reflecting an
increase in salaries and benefits, consulting expenses, insurance
costs and depreciation expenses, and the aforementioned decrease in
sales. As of December 31, 2007, Tiens had $114 million of retained
earnings and total shareholders' equity of $146 million. Jinyuan
Li, Chairman, President and CEO of Tiens, said, "2007 was a year in
which Tiens faced challenges from the direct selling environment in
China and in exporting its products internationally. To date no
problems have been found with our high quality products under the
national campaign in China to prevent the export of unsafe food and
substandard products. We continued to lay the groundwork for both
domestic and international sales growth by acquiring Life
Resources, which will provide new research and development
facilities and enhance our manufacturing capabilities." 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 52 countries. Since its
establishment, Tiens has developed and produced 33 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 100 branches. Outside of China, Tiens sells its products to
affiliated companies in 52 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 TWELVE MONTHS ENDED
DECEMBER 31, 2007 AND 2006 Three months ended Twelve months ended
December 31, December 31, 2007 2006 2007 2006 REVENUE - RELATED
PARTIES $ 13,315,311 $ 16,587,160 $ 54,900,060 $ 66,790,466 COST OF
SALES 4,546,711 4,367,702 16,526,695 18,082,441 GROSS PROFIT
8,768,600 12,219,458 38,373,365 48,708,025 SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 3,953,263 4,148,297 14,306,660 12,789,810
INCOME FROM OPERATIONS 4,815,337 8,071,161 24,066,705 35,918,215
OTHER (EXPENSE) INCOME, NET 475,918 33,633 1,520,208 161,091 INCOME
BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST 5,291,255
8,104,794 25,586,913 36,079,306 PROVISION FOR INCOME TAXES 416,222
635,408 2,026,875 2,823,899 INCOME BEFORE MINORITY INTEREST
4,875,033 7,469,386 23,560,038 33,255,407 MINORITY INTEREST 995,606
1,566,759 4,966,397 6,963,330 NET INCOME 3,879,427 5,902,627
18,593,641 26,292,077 OTHER COMPREHENSIVE INCOME Foreign currency
translation adjustment 3,334,871 1,083,976 8,265,358 3,480,775
COMPREHENSIVE INCOME $ 7,214,298 $ 6,986,603 $ 26,858,999 $
29,772,852 EARNINGS PER SHARE, BASIC AND DILUTED $ 0.05 $ 0.08 $
0.26 $ 0.37 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 DECEMBER 31, 2007
AND DECEMBER 31, 2006 A S S E T S December 31, December 31, 2007
2006 CURRENT ASSETS: Cash $ 48,678,945 $ 54,270,065 Accounts
receivable, trade - related parties, net of allowance for doubtful
accounts of $71,700 and $86,776 as of December 31, 2007 and
December 31, 2006, respectively 14,268,229 12,926,670 Accounts
receivable, trade - third parties 104,398 18,135 Inventories
5,949,963 6,845,108 Other receivables 892,489 349,905 Other
receivables - related parties 13,070,907 8,397,227 Employee
advances 64,336 111,121 Prepaid expense 623,638 2,135,917 Total
current assets 83,652,905 85,054,148 Property, plant and equipment,
net 18,322,619 30,511,319 OTHER ASSETS: Intangible assets, net
2,603,084 510,183 Long-term prepaid expenses 5,301,847 7,031,348
Loans receivable - related party -- 25,640,000 Acquisition deposit
71,747,182 -- Total other assets 79,652,113 33,181,531 Total assets
$ 181,627,637 $ 148,746,998 TIENS BIOTECH GROUP (USA), INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF DECEMBER 31, 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 December 31, December 31, 2007 2006 CURRENT
LIABILITIES: Accounts payable $ 4,070,906 $ 4,123,105 Advances from
customers - related parties 1,700,838 1,570,120 Wages and benefits
payable 1,250,685 992,068 Other taxes payable 536,819 93,714 Income
taxes payable 665,726 876,046 Other payables 1,133,539 500,213
Other payables - related parties 7,938,205 522,105 Dividend payable
to minority interest 4,902,629 238,311 Current portion of long-term
debt, related party 2,130,000 2,130,000 Total current liabilities
24,329,347 11,045,682 NON-CURRENT LIABILITIES: Long term debt, net
of current portion, related party 4,267,742 6,397,742 Other
payables-non-current 538,130 -- Total non-current liabilities
4,805,872 6,397,742 Total liabilities 29,135,219 17,443,424
MINORITY INTEREST 6,144,063 11,883,323 SHAREHOLDERS' EQUITY: 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
8,842,009 8,842,009 Additional paid-in-capital 69,105 -- Statutory
reserves 9,420,783 9,420,783 Retained earnings 113,964,778
95,371,137 Accumulated other comprehensive income 13,980,346
5,714,988 Total shareholders' equity 146,348,355 119,420,251 Total
liabilities and shareholders' equity $ 181,627,637 $ 148,746,998
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES REVENUE BY REGION
Three months ended December 31, 2007 2006 Change China $ 6,739,641
$ 6,793,469 - 0.8% International $ 6,575,670 $ 9,793,691 -32.9%
Total $13,315,311 $16,587,160 -19.7% Twelve months ended December
31, 2007 2006 Change China $22,476,135 $27,074,979 -17.0%
International $32,423,925 $39,715,487 -18.4% Total $54,900,060
$66,790,466 -17.8% For more information, please contact: Investor
Relations Tiens Biotech Group (USA), Inc. Tel: +86-22-8213-7915
Fax: +86-22-8213-7667 Email: Carl Hymans G. S. Schwartz & Co.
Tel: +1-212-725-4500 Fax: +1-212-725-9188 Email: Web site:
http://www.tiens-bio.com/ DATASOURCE: Tiens Biotech Group (USA),
Inc. CONTACT: Investor Relations - Tiens Biotech Group (USA), Inc.
+86-22- 8213-7915 fax: +86-22-8213-7667 or ; Or Carl Hymans at G.
S. Schwartz & Co., +1-212-725-4500, fax: +1-212-725-9188 or Web
site: http://www.tiens-bio.com/
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