TBV Tiens Biotech Grp. (Usa) Common Stock

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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