NEW YORK, Aug. 14 /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 second quarter and six months ended June 30, 2009. Revenue for
the second quarter of 2009 increased 4.6% to $20.6 million,
compared to $19.7 million for the second quarter of 2008,
reflecting an increase in sales in China. Net income for the
quarter rose 83% to $10.3 million, or $0.14 per share, compared to
net income of $5.6 million, or $0.07 per share, for the 2008 second
quarter. For the second quarter of 2009, international revenue was
$10.9 million, compared to $11.1 million for the same period in
2008. The decrease in international revenue was mainly due to a
decrease in sales in the Europe-Asia region by $2.9 million in the
second quarter of 2009, as compared to the second quarter of 2008.
International sales continues to benefit from export restrictions
having been reduced since China's Administration of Quality
Supervision, Inspection and Quarantine completed in late 2008 its
national campaign against unsafe food and substandard products,
which adversely affected the Company's international sales in the
first half of 2008. For the second quarter of 2009, revenue in
China was $9.7 million, an increase of 13.6% compared to $8.5
million for the same period in 2008. This increase in domestic
revenue was due to increased marketing efforts in China. For the
six months ended June 30, 2009, revenue was $38.8 million, an
increase of 19.4% compared to $32.5 million for the same period in
2008. The increase in revenue for the first six months of 2009 was
primarily driven by an increase of 47.7% in international sales.
Net income for the six months ended June 30, 2009 was $19.3
million, an increase of 90.5% compared to $10.1 million for the
same period in 2008. This increase reflects the increase in sales
and the transfer of production and sale of semi-finished products
from the Company's subsidiary, Tianjin Tianshi Biological
Development Co., Ltd., to its other subsidiary, Tianjin Tiens Life
Resources Co., Ltd., which has an exemption from PRC income taxes.
Other Highlights Cost of sales for the second quarter of 2009
decreased to $6.1 million, or by 1.4%, compared to $6.2 million for
the same period in 2008. This decrease was mainly due to the
decrease in the cost of some materials, such as capsules. Gross
profit for the second quarter of 2009 was $14.4 million, an
increase of 7.3% compared to $13.5 million for the same period in
2008. The gross profit margin for the second quarter of 2009 was
70.2%, compared to 68.4% for the same period in 2008. Selling,
general and administrative expenses were $4.0 million for the
second quarter of 2009, a decrease of 21.1% compared to $5.1
million for the same period in 2008. The selling and administrative
expenses as a percentage of sales was 19.5% for the second quarter
of 2009 compared to 25.9% for the same period in 2008. This
decrease was primarily due to the decrease in salary and insurance
expenses as a result of salary reductions and reduced headcount,
research and development expenses and commission expenses. Cost of
sales for the six months ended June 30, 2009 increased to $11.9
million, an increase of 15.7% compared to $10.2 million for the
same period in 2008. Cost of sales for the period increased 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 six months ended June 30, 2009 was $26.9
million, an increase of 21.2% compared to $22.2 million for the
same period in 2008. The gross profit margin was 69.4% compared to
68.5% for the same period in 2008. These increases were mainly due
to the increase of revenue overall and the increase in the portion
of the products the Company sold bearing a higher profit margin
than that for the same period of 2008. Selling, general and
administrative expenses for the six months ended June 30, 2009 were
$7.1 million, a decrease of 14.3% compared to $8.3 million in the
same period in 2008. For the six months ended June 30, 2009,
selling, general and administrative expenses as a percentage of
sales was 18.4%, compared to 25.7% for the same period in 2008.
This decrease was mainly due to the decrease in salary and
insurance expenses as a result of salary reductions. In China,
Tiens sells its products to Tianjin Tianshi Biological Engineering
Co., Ltd. ("Tianshi Engineering"). To qualify for a direct selling
license in China, Tianshi Engineering is required to produce a part
of the products that it sells in China. As a result, in 2006, Tiens
began to sell semi-finished products to Tianshi Engineering, which
jointly shares licenses with Tiens to produce, manufacture and sell
the products. The semi-finished products, which Tiens is now
exclusively selling in China, have lower sales prices than the
finished products Tiens had previously sold to Tianshi Engineering.
The application of Tianshi Engineering for a direct selling license
in China is still pending. Tiens continues to strive to expand its
market share in China through the branches, chain stores, and
Chinese affiliated companies of Tianshi Engineering. To enhance its
position in this competitive market, Tianshi Engineering continues
to increase its marketing activities in China, including opening
additional branches across China, developing a nation-wide
advertising campaign, encouraging media coverage and strengthening
the Tiens brand. As of June 30, 2009, Tiens had $121.3 million of
retained earnings and total shareholders' equity of $168.0 million.
Jinyuan Li, Chairman, President and CEO of Tiens, said, "Tiens is
pleased to report another quarter of positive results including a
significant increase in net income. We are confident that
international sales will remain strong and that domestic sales will
return to, and potentially exceed, previous levels as customers
begin to replenish stored up products. We are committed to further
expanding our growing international customer base, gaining greater
market share in China, and further implementing our strategic plans
for long term growth." 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 SIX
MONTHS ENDED JUNE 30, 2009 AND 2008 (Unaudited) Three months ended
Six months ended June 30, June 30, 2009 2008 2009 2008 REVENUE -
RELATED PARTIES $20,551,036 $19,654,447 $38,788,581 $32,475,268
COST OF SALES - RELATED PARTIES 6,117,409 6,203,705 11,852,468
10,243,765 GROSS PROFIT 14,433,627 13,450,742 26,936,113 22,231,503
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,014,591 5,088,597
7,145,527 8,335,796 INCOME FROM OPERATIONS 10,419,036 8,362,145
19,790,586 13,895,707 Interest expense (53,201) (80,078) (105,817)
(132,662) Interest income 100,779 268,517 186,547 505,849 Other
(expense) (28,144) (1,246,287) (73,432) (986,864) OTHER (EXPENSE)
INCOME, NET 19,434 (1,057,848) 7,298 (613,677) INCOME BEFORE INCOME
TAXES 10,438,470 7,304,297 19,797,884 13,282,030 INCOME TAXES
123,101 1,664,054 482,716 3,144,448 NET INCOME 10,315,369 5,640,243
19,315,168 10,137,582 LESS: Net income attributable to the
noncontrolling interest (139,071) (998,642) (546,045) (1,887,079)
NET INCOME ATTRIBUTABLE TO THE COMPANY 10,176,298 4,641,601
18,769,123 8,250,503 OTHER COMPREHENSIVE INCOME Foreign currency
translation adjustment 10,989 2,675,768 210,992 7,099,628
COMPREHENSIVE INCOME ATTRIBUTABLE TO THE COMPANY 10,187,287
7,317,369 18,980,115 15,350,131 COMPREHENSIVE INCOME ATTRIBUTABLE
TO THE NON CONTROLLING INTEREST 140,300 1,174,080 559,895 2,337,664
COMPREHENSIVE INCOME $10,327,587 $8,491,449 $19,540,010 $17,687,795
EARNINGS PER SHARE, BASIC AND DILUTED $0.14 $0.07 $0.26 $0.12
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 JUNE 30, 2009 AND
DECEMBER 31, 2008 June 30, December 31, 2009 2008 (Unaudited) A S S
E T S CURRENT ASSETS: Cash $10,387,475 $20,992,573 Cash related to
assets held for sale 23,953,055 23,861,938 Total cash 34,340,530
44,854,511 Accounts receivable, trade - related parties, net of
allowance for doubtful accounts of $913,486 and $1,108,789 as of
June 30, 2009 and December 31, 2008, respectively 29,702,386
23,941,431 Inventories 5,032,446 8,365,607 Other receivables
801,210 813,591 Other receivables - related parties 13,494,896
15,729,076 Employee advances 194,073 112,591 Prepaid expenses
737,779 301,898 Prepaid taxes 1,717,898 1,531,207 Other assets held
for sale 10,828,631 10,904,842 Total current assets 96,849,849
106,554,754 PROPERTY, PLANT AND EQUIPMENT, net 10,796,643
10,274,643 OTHER ASSETS: Construction in progress 92,323,942
72,300,104 Construction deposits 4,695,601 2,586,302 Intangible
assets, net 13,002,520 13,137,195 Other assets 73,050 87,541 Total
other assets 110,095,113 88,111,142 Total assets $217,741,605
$204,940,539 L I A B I L I T I E S A N D S H A R E H O L DE R S' E
Q U I T Y CURRENT LIABILITIES: Accounts payable $5,237,723 $
$6,283,849 Advances from customers - related parties 3,024,666
3,239,650 Wages and benefits payable 747,381 1,449,146 Other taxes
payable 269,717 117,818 Contractor deposits 321,990 163,248
Contractor payables 14,229,565 11,871,456 Other payables 1,541,229
1,933,743 Other payables - related parties 213,263 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 116,729 122,047 Total current liabilities 27,832,263
33,684,857 NON-CURRENT LIABILITIES Long term debt, net of current
portion, related party 1,072,742 2,137,742 Deferred income
11,224,209 11,208,844 Total non current liabilities 12,296,951
13,346,586 Total liabilities 40,129,214 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, respectively 71,334 71,334 Paid-in-capital 9,385,565
9,234,123 Statutory reserves 13,217,217 9,420,783 Retained earnings
121,298,044 106,325,356 Accumulated other comprehensive income
24,062,054 23,851,062 Total shareholders' equity of the company
168,034,214 148,902,658 Noncontrolling interest 9,578,177 9,006,438
Total equity 177,612,391 157,909,096 Total liabilities and equity
$217,741,605 $204,940,539 TIENS BIOTECH GROUP (USA), INC. AND
SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX
MONTHS ENDED JUNE 30, 2009 AND 2008 (UNAUDITED) Six months ended
June 30, 2009 2008 CASH FLOWS FROM OPERATING ACTIVITIES: Net income
$19,315,168 $10,137,582 Adjustments to reconcile net income to cash
provided by (used in) operating activities: Provision for doubtful
accounts (196,863) 37,715 Depreciation 1,112,849 1,373,096
Amortization 194,380 140,911 Interest expense (income) 2,710
(92,523) Gain on sale of assets (15,717) (8,554) (Increase)
decrease in assets: Accounts receivable, trade - related parties
(5,532,449) (15,693,689) Accounts receivable, trade - third parties
-- 22,722 Other receivables 10,743 498,556 Other receivables -
related parties (992,241) (526,327) Inventories 3,355,993 190,894
Employee advances (80,805) (185,415) Prepaid expense (435,576)
365,778 Increase (decrease) in liabilities: Accounts payable
(1,579,065) 1,223,358 Advances from customers - related parties
(219,470) 663,444 Wages and benefits payable (703,898) (422,254)
Other taxes payable 8,920 1,205,680 Other payables (395,970)
(67,118) Other payables - related parties (202,847) 16,388 Net cash
provided by (used in) operating activities 13,645,862 (1,119,756)
CASH FLOWS FROM INVESTING ACTIVITIES: Collection from loans to
local government 105,193 450,197 Repayment of loan from related
parties -- 2,133,222 Construction deposits (3,846,961) (2,206,145)
Contractor deposits 158,551 101,801 Addition to construction in
progress (15,954,182) (9,722,463) Proceeds from sales of properties
17,039 61,152 Purchase of equipment and automobiles (921,388)
(360,192) Net cash used in investing activities (20,441,748)
(9,542,428) CASH FLOWS FROM FINANCING ACTIVITIES: Loan from
(repayment to) related parties (3,945,510) 7,400,000 Payments on
long term debt, related party -- (1,065,000) Proceeds for joint
venture investor in Dongfeng -- 2,828 Payments to minority interest
shareholder -- (5,070,091) Increase in paid in capital 163,331 --
Net cash provided by (used in) financing activities (3,782,179)
1,267,737 EFFECT OF EXCHANGE RATE CHANGES ON CASH 64,084 3,053,932
DECREASE IN CASH (10,513,981) (6,340,515) CASH, beginning of period
44,854,511 54,081,848 CASH, end of period $34,340,530 $47,741,333
Supplemental disclosures of cash flow information Cash paid during
the period for: Interest $105,817 $132,662 Income taxes $667,347
$1,822,619 TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES REVENUE
BY REGION Three months ended June 30, 2009 2008 Change China
$9,669,603 $8,509,932 13.6% International $10,881,433 $11,144,515
-2.4% Total $20,551,036 $19,654,447 4.6% Six months ended June 30,
2009 2008 Change China $12,412,223 $14,615,711 -15.1% International
$26,376,358 $17,859,557 47.7% Total $38,788,581 $32,475,268 19.4%
For more information, please contact: Investor Relations Tiens
Biotech Group (USA), Inc. Tel: +86-22-8213-3491 Fax:
+86-22-8213-7914 Email: 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., +86-22-8213-3491 (Tel), or
+86-22-8213-7914 (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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