NEW YORK, Nov. 13 /PRNewswire-Asia-FirstCall/ -- Tiens Biotech
Group (USA), Inc. (the "Company" or "Tiens", NYSE Amex: TBV),
http://www.tiens-bio.com/ , today announced financial results for
the third quarter and nine months ended September 30, 2009. Revenue
for the third quarter of 2009 was $9.4 million, compared to $26.2
million for the third quarter of 2008. Net income for the third
quarter of 2009 was $2.9 million, or $0.03 per share, compared to
net income of $14.6 million, or $0.20 per share, for the third
quarter of 2008. Results for the third quarter of 2009 reflect a
decrease in revenue in China to $4.7 million, compared to $14.6
million for the same period in 2008. The revenue decrease is
attributed to a decline in domestic distributors' demand in the
third quarter of 2009 after stocking up on products in the second
quarter of 2009 due to the Company's increased marketing efforts in
the second quarter. In addition, revenue for the third quarter of
2008 was unusually high due to a future price increase announcement
by Tianshi Engineering during that quarter. For the third quarter
of 2009, international revenue was $4.8 million, compared to $11.6
million for the same period in 2008. The decrease in international
revenue was mainly due to a decrease in sales in the Asia-Pacific
region by $6.1 million and the Europe-Asia region by $2.5 million
in the third quarter of 2009, as compared to the third quarter of
2008. International revenue results for the third quarter of 2009
reflect a decline in customer demand for the period as customers
stocked up on certain products during the first two quarters of
2009. Export restrictions were reduced in late 2008 as China's
Administration of Quality Supervision, Inspection and Quarantine
completed its national campaign against unsafe food and substandard
products. As a result of reduced export restrictions, customers
were able to purchase more products in the first two quarters of
2009. Revenue for the nine months ended September 30, 2009 was
$48.2 million, compared to $58.7 million for the nine months ended
September 30, 2008, reflecting the aforementioned decrease in sales
in China. Net income for the nine months ended September 30, 2009
was $22.2 million, or $0.29 per share, compared to $24.8 million,
or $0.32 per share for nine months ended September 30, 2008. For
the nine months ended September 30, 2009, revenue in China was
$17.1 million, compared to $29.2 million for the nine months ended
September 30, 2008 reflecting the aforementioned reduction in
distributors' product demand in the third quarter. For the nine
months ended September 30, 2009, international revenue was $31.2
million, compared to $29.5 million for the same period in 2008. The
increase in international revenue for the nine months of 2009
reflects a strong increase in international sales in the first
quarter of 2009 after China's Administration of Quality
Supervision, Inspection and Quarantine ceased its export
restrictions. From August 2007 to the end of 2008, it implemented
an ongoing national campaign in China against unsafe food and
substandard products, which resulted in a general slow-down and
backlog of export clearances for Chinese food products. Other
Highlights Cost of sales for the third quarter of 2009 was $3.1
million, compared to $6.6 million for the same period in 2008. The
decrease was mainly due to the decrease in revenue for the third
quarter of 2009. Gross profit for the third quarter of 2009 was
$6.3 million, compared to $19.6 million for the same period in
2008. The gross profit margin for the third quarter of 2009 was
66.7%, compared to 74.8% for the same period in 2008. Selling,
general and administrative expenses for the third quarter of 2009
were $2.9 million, compared to $4.6 million for the same period in
2008. The selling, general and administrative expenses as a
percentage of sales was 30.9% for the third quarter of 2009
compared to 17.4% for the same period in 2008. This increase was
primarily due to the decrease in revenue for the third quarter of
2009 compared to the same period of 2008. Cost of sales for the
nine months ended September 30, 2009, was $15.0 million, compared
to $16.9 million for the same period in 2008. Cost of sales for the
period decreased at a slightly lower rate than revenue, primarily
due to fixed costs, which do not increase or decrease in line with
revenue changes. Gross profit for the nine months ended September
30, 2009 was $33.2 million, compared to $41.8 million the same
period in 2008, and the gross profit margin was 68.9% compared to
71.3% for the same period in 2008. These decreases were mainly due
to the decrease of revenue and the increase of fixed cost as a
percentage of revenue. Selling, general and administrative expenses
for the nine months ended September 30, 2009 were $10.1 million,
compared to $12.9 million in the same period in 2008. For the nine
months ended September 30, 2009, selling, general and
administrative expenses as a percentage of sales was 20.9%,
compared to 22.0% for the same period in 2008. This decrease was
primarily due to the decrease in selling, general and
administrative expenses for the third quarter of 2009. As of
September 30, 2009, Tiens had $123.5 million of retained earnings
and total shareholders' equity of $170.5 million. Jinyuan Li,
Chairman, President and CEO of Tiens, said, "We are confident that
international and domestic sales will return to, and potentially
exceed, previous levels as customers and distributors begin to
replenish stored up products. We will continue to implement our
strategic plans for long-term growth and remain committed to
expanding our international customer base and gaining greater
market share in China." About Tiens Biotech Group (USA), Inc.
http://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 46 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 98 branches. Outside of China, Tiens sells its products to
affiliated companies that 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." - Tables Follow - 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, 2009 AND 2008 (Unaudited) Three months
ended Nine months ended September 30, September 30, 2009 2008 2009
2008 REVENUE - RELATED PARTIES $9,439,739 $26,195,853 $48,228,320
$58,671,121 COST OF SALES - RELATED PARTIES 3,144,650 6,606,502
14,997,118 16,850,267 GROSS PROFIT 6,295,089 19,589,351 33,231,202
41,820,854 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,916,202
4,562,946 10,061,729 12,898,742 INCOME FROM OPERATIONS 3,378,887
15,026,405 23,169,473 28,922,112 Interest expense (40,363) (67,207)
(146,180) (199,869) Interest income 76,154 227,326 262,701 733,175
Other expense (16,122) (412,620) (89,554) (1,399,484) OTHER
(EXPENSE) INCOME, NET 19,669 (252,501) 26,967 (866,178) INCOME
BEFORE INCOME TAXES 3,398,556 14,773,904 23,196,440 28,055,934
INCOME TAXES 544,688 152,990 1,027,404 3,297,438 NET INCOME
2,853,868 14,620,914 22,169,036 24,758,496 LESS: Net income
attributable to the noncontrolling interest (617,638) (92,326)
(1,163,683) (1,979,405) NET INCOME ATTRIBUTABLE TO THE COMPANY
2,236,230 14,528,588 21,005,353 22,779,091 OTHER COMPREHENSIVE
INCOME Foreign currency translation adjustment 170,638 807,035
381,630 7,906,663 COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY
2,406,868 15,335,623 21,386,983 30,685,754 COMPREHENSIVE INCOME
ATTRIBUTABLE TO THE NON-CONTROLLING INTEREST 629,028 94,943
1,188,923 2,432,607 COMPREHENSIVE INCOME $3,035,896 $15,430,566
$22,575,906 $33,118,361 EARNINGS PER SHARE, BASIC AND DILUTED $0.03
$0.20 $0.29 $0.32 WEIGHTED AVERAGE SHARES OUTSTANDING 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,
2009 AND DECEMBER 31, 2008 September 30, December 31, 2009 2008
(Unaudited) ASSETS CURRENT ASSETS: Cash $9,518,495 $20,992,573 Cash
related to assets held for sale 23,984,135 23,861,938 Total cash
33,502,630 44,854,511 Accounts receivable, trade - related parties,
net of allowance for doubtful accounts of $208,535 and $1,108,789
as of September 30, 2009 and December 31, 2008, respectively
14,215,995 23,941,431 Inventories 5,595,637 8,365,607 Other
receivables 932,781 813,591 Other receivables - related parties
13,833,872 15,729,076 Employee advances 193,525 112,591 Prepaid
expenses 639,435 301,898 Prepaid taxes 1,489,956 1,531,207 Other
assets held for sale 10,839,419 10,904,842 Total current assets
81,243,250 106,554,754 PROPERTY, PLANT AND EQUIPMENT, net
10,445,464 10,274,643 OTHER ASSETS: Construction in progress
108,687,141 72,300,104 Construction deposits 2,980,428 2,586,302
Intangible assets, net 12,939,643 13,137,195 Other assets 8,772,637
87,541 Total other assets 133,379,849 88,111,142 Total assets
$225,068,563 $204,940,539 TIENS BIOTECH GROUP (USA), INC. AND
SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2009
AND DECEMBER 31, 2008 LIABILITIES AND SHARE HOLDERS' EQUITY
September 30, December 31, 2009 2008 (Unaudited) CURRENT
LIABILITIES: Accounts payable $4,690,894 $6,283,849 Advances from
customers - related parties 4,056,804 3,239,650 Wages and benefits
payable 724,125 1,449,146 Other taxes payable -- 117,818 Contractor
deposits 249,195 163,248 Contractor payables 18,214,994 11,871,456
Other payables 1,632,208 1,933,743 Other payables - related parties
216,941 6,373,900 Current portion of long-term debt, related party
2,130,000 2,130,000 Liabilities directly associated with assets
classified as held for sale 114,910 122,047 Total current
liabilities 32,030,071 33,684,857 NON-CURRENT LIABILITIES Long-term
debt, net of current portion, related party 1,072,742 2,137,742
Deferred income 11,235,733 11,208,844 Total non current liabilities
12,308,475 13,346,586 Total liabilities 44,338,546 47,031,443
EQUITY: Shareholders' equity of the Company: Common stock, $0.001
par value, 250,000,000 shares authorized, 71,333,586 issued and
outstanding 71,334 71,334 Paid-in-capital 9,461,369 9,234,123
Statutory reserves 13,217,217 9,420,783 Retained earnings
123,534,272 106,325,356 Accumulated other comprehensive income
24,232,692 23,851,062 Total shareholders' equity of the Company
170,516,884 148,902,658 Noncontrolling interest 10,213,133
9,006,438 Total equity 180,730,017 157,909,096 Total liabilities
and equity $225,068,563 $204,940,539 TIENS BIOTECH GROUP (USA),
INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE
NINE MONTHS ENDED SEPTEMBER 30, 2009 AND 2008 (UNAUDITED) Nine
months ended September 30, 2009 2008 CASH FLOWS FROM OPERATING
ACTIVITIES: Net income $22,169,036 $24,758,496 Adjustments to
reconcile net income to cash provided by (used in) operating
activities: Provision for doubtful accounts (902,297) 89,913
Depreciation 1,662,206 2,063,597 Amortization 291,418 226,559
Interest income (9,357) (138,328) Gain on sale of assets (14,846)
(8,644) (Increase) decrease in assets: Accounts receivable, trade -
related parties 10,678,476 (25,058,774) Accounts receivable, trade
- third parties -- 109,101 Other receivables (121,058) 639,999
Other receivables - related parties (1,306,527) 452,044 Inventories
2,801,809 (1,090,429) Employee advances (80,873) (345,666) Prepaid
expense (336,620) 347,689 Increase (decrease) in liabilities:
Accounts payable (1,687,613) 3,098,509 Advances from customers -
related parties 808,830 1,233,804 Wages and benefits payable
(768,334) (381,633) Other taxes payable (31,337) (1,834,741) Other
payables (176,274) (86,004) Other payables - related parties
(76,484) 282,945 Net cash provided by operating activities
32,900,155 4,358,437 CASH FLOWS FROM INVESTING ACTIVITIES:
Collection from loans to local government 105,208 454,941 Repayment
of loan from related parties -- 2,155,702 Acquisition of intangible
assets -- (6,037,069) Construction deposits (3,465,755) (3,363,647)
Contractor deposits 85,498 (390,634) Addition to construction in
progress (26,936,754) (18,573,180) Equipment deposits (8,700,872) -
Proceeds from sales of properties 17,041 61,797 Purchase of
equipment and automobiles (1,755,815) (574,822) Net cash used in
investing activities (40,651,449) (26,266,912) CASH FLOWS FROM
FINANCING ACTIVITIES: Loan from (repayment to) related parties
(3,946,050) 6,578,584 Payments on long term debt, related party --
(1,065,000) Payments to minority interest shareholder --
(5,123,520) Increase in paid in capital 245,030 -- Increase in
deferred income -- 5,861,232 Net cash provided by (used in)
financing activities (3,701,020) 6,251,296 EFFECT OF EXCHANGE RATE
CHANGES ON CASH 100,433 3,242,494 DECREASE IN CASH (11,351,881)
(12,414,685) CASH, beginning of period 44,854,511 54,081,848 CASH,
end of period $33,502,630 $41,667,163 Supplemental disclosure of
cash flow information Cash paid during the period for: Interest
$105,817 $132,662 Income taxes $871,764 $3,857,173 TIENS BIOTECH
GROUP (USA), INC. AND SUBSIDIARIES REVENUE BY REGION (Unaudited)
Three months ended September 30, 2009 2008 Change China $4,663,939
$14,576,060 -68.0% International $4,775,800 $11,619,793 -58.9%
Total $9,439,739 $26,195,853 -64.0% Nine months ended September 30,
2009 2008 Change China $17,076,162 $29,191,771 -41.5% International
$31,152,158 $29,479,350 5.7% Total $48,228,320 $58,671,121 -17.8%
For more information, please contact: Investor Relations Tiens
Biotech Group (USA), Inc. Tel: +86-22-8213-7594 Fax:
+86-22-8213-7594 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:
Investor Relations, Tiens Biotech Group (USA), Inc.,
+86-22-8213-7594 (Tel), or +86-22-8213-7594 (Fax), or ; Carl
Hymans, G. S. Schwartz & Co., +1-212-725-4500 (Tel), or
+1-212-725-9188 (Fax), or Web site: http://www.tiens-bio.com/
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