Attached files
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| 8-K - TIENS BIOTECH GROUP USA INC | v216999_8k.htm |
FOR IMMEDIATE RELEASE
CONTACT:
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Investor Relations
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Debra Berliner
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Tiens Biotech Group (USA), Inc.
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G. S. Schwartz & Co.
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Tel: +86-22-8213-7335
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Tel: 212-725-4500
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Fax: +86-22-8213-7914
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Fax: 212-725-9188
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Email: investor@tiens-bio.com
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Email: dberliner@schwartz.com
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http://www.tiens-bio.com
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TIENS BIOTECH GROUP (USA) REPORTS 2010 RESULTS
TIANJIN, CHINA – March 31, 2011 –Tiens Biotech Group (USA), Inc. (the “Company” or “Tiens”, NYSE AMEX: TBV), a company dedicated to the research, development, manufacturing, and marketing of nutrition supplement products, including wellness products and dietary supplements, today announced financial results for the year ended December 31, 2010.
For 2010, revenue was $41.3 million, compared to $62.0 million for 2009.
Net income for 2010 was $4.8 million, or $0.07 per share, compared to $23.8 million, or $0.33 per share for 2009.
Results for 2010 mainly reflect a decrease in international sales. For 2010, international revenue was $16.4 million, compared to $34.7 million for 2009. In 2008, China’s Administration of Quality Supervision, Inspection and Quarantine carried out a national campaign against unsafe food and substandard products, which brought on a general slow-down and backlog of export clearances for Chinese food products. Upon the lifting of the regulations, overseas affiliated companies began to purchase more products, thereby increasing sales for 2009.
In addition, Tiens’ Indonesia affiliated company has not purchased from the Company during the year of 2010, given they purchased more products in 2009 after the 2008 product scarcity for the reason noted above. In addition, local Original Equipment Manufacturers in Indonesia have been producing healthcare products with the Company’s semi-finished goods, which have a profit margin that is much lower than the profit margin of finished goods.
Tiens’ affiliated companies in many regions have made certain adjustments to their marketing programs and reorganizations at their branch and higher levels, which are expected to boost sales performance over the long-run, but negatively affect short-term sales.
Other Highlights
Cost of sales were $15.0 million in 2010 compared to $20.2 million in 2009, a decrease of 25.6%. This decrease was primarily due to the corresponding decrease in sales. Cost of sales decreased at a lower rate than revenue, primarily due to fixed costs, which do not increase or decrease in line with sales.
Gross profit decreased by 37.0% to $26.3 million in 2010, compared to $41.8 million in 2009. The gross profit margin for 2010 was 63.7% compared to 67.5% in 2009.
Selling, general and administrative expenses increased by 22.0% to $19.5 million in 2010, compared to $16.0 million in 2009. The increase was primarily due to increases in allowance for bad debt ($1.9 million), salaries expenses ($0.7 million) and research & development expenses ($0.6 million).
As of December 31, 2010, Tiens had $128.0 million of retained earnings and total shareholders' equity of $285.5 million.
In addition, Tiens reported that on March 11, 2011, Tianjin Tianshi Biological Engineering Co., Ltd. (Tianshi Engineering) was awarded a direct selling license in Tianjin.
Jinyuan Li, Chairman, President and CEO of Tiens, said, “We remain confident that domestic sales will return to, and potentially exceed, previous levels, as distributors begin to replenish their stock of our products. In addition, we maintain this same positive sentiment regarding international sales, which we expect will benefit from the removal of export restrictions and gradual economic improvement. We are steadfast in our commitment to building greater market share in China, expanding our international customer base, and further implementing our strategic plans for long-term domestic and international growth.”
About Tiens Biotech Group (USA), Inc. 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 45 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 87 branches. Outside of China, Tiens sells its products to affiliated companies in 45 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; and (v) 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.
-Tables Follow-
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND OTHER COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31, 2010 and 2009
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2010
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2009
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REVENUE - RELATED PARTIES
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$ | 41,021,135 | $ | 60,032,968 | ||||
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REVENUE - THIRD PARTIES
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323,585 | 1,943,101 | ||||||
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COST OF SALES - RELATED PARTIES
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14,850,739 | 18,754,680 | ||||||
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COST OF SALES - THIRD PARTIES
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158,638 | 1,412,812 | ||||||
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GROSS PROFIT
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26,335,343 | 41,808,577 | ||||||
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SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
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19,530,501 | 16,009,382 | ||||||
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INCOME FROM OPERATIONS
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6,804,842 | 25,799,195 | ||||||
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Interest expense
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(230,905 | ) | (186,543 | ) | ||||
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Interest income
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18,362 | 301,709 | ||||||
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Other expense
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35,965 | (176,757 | ) | |||||
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OTHER EXPENSE, NET
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(176,578 | ) | (61,591 | ) | ||||
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INCOME BEFORE INCOME TAXES
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6,628,264 | 25,737,604 | ||||||
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INCOME TAXES
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1,469,548 | 930,703 | ||||||
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NET INCOME
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5,158,716 | 24,806,901 | ||||||
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LESS: Net income attributable to the noncontrolling interest
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(323,101 | ) | (965,557 | ) | ||||
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NET INCOME ATTRIBUTABLE TO THE COMPANY
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4,835,615 | 23,841,344 | ||||||
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OTHER COMPREHENSIVE INCOME:
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||||||||
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Foreign currency translation adjustment
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5,131,503 | 441,140 | ||||||
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Loss from the realization of foreign currency sale
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- | (6,030,079 | ) | |||||
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COMPREHENSIVE INCOME ATTRIBUTABLE
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TO THE COMPANY
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9,967,118 | 18,252,405 | ||||||
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COMPREHENSIVE INCOME ATTRIBUTABLE
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TO THE NONCONTROLLING INTEREST
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664,854 | 993,504 | ||||||
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COMPREHENSIVE INCOME
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$ | 10,631,972 | $ | 19,245,909 | ||||
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EARNINGS PER SHARE,
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BASIC AND DILUTED
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$ | 0.07 | $ | 0.33 | ||||
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WEIGHTED AVERAGE NUMBER OF SHARES,
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BASIC AND DILUTED
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71,333,586 | 71,333,586 | ||||||
The accompanying notes are an integral part of this statement.
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2010 AND DECEMBER 31, 2009
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December 31,
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December 31,
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|||||||
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2010
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2009
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A S S E T S
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CURRENT ASSETS:
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Cash
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$ | 10,155,522 | $ | 1,848,328 | ||||
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Accounts receivable, trade - related parties, net of
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allowance for doubtful accounts of $3,869,617 and $1,419,178
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as of December 31, 2010 and December 31, 2009 , respectively
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10,012,861 | 15,379,312 | ||||||
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Inventories
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5,703,349 | 5,328,052 | ||||||
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Other receivables
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1,045,952 | 995,657 | ||||||
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Other receivables - related parties
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17,376,522 | 44,561,626 | ||||||
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Employee advances
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170,842 | 115,673 | ||||||
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Prepaid expenses, net
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415,208 | 658,193 | ||||||
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Prepaid taxes
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3,646,140 | 407,534 | ||||||
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Total current assets
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48,526,396 | 69,294,375 | ||||||
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PROPERTY, PLANT AND EQUIPMENT, net
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72,037,542 | 10,124,483 | ||||||
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OTHER ASSETS:
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Construction in progress
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128,715,283 | 125,572,621 | ||||||
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Construction deposits
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12,490,855 | 1,405,997 | ||||||
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Intangible assets, net
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12,987,000 | 12,864,295 | ||||||
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Other assets
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10,721,040 | 11,847,937 | ||||||
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Total other assets
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164,914,178 | 151,690,850 | ||||||
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Total assets
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$ | 285,478,116 | $ | 231,109,708 | ||||
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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
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CURRENT LIABILITIES:
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Accounts payable
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$ | 14,120,791 | $ | 5,012,157 | ||||
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Advances from customers - related parties
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8,688,877 | 4,426,751 | ||||||
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Wages and benefits payable
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1,613,782 | 1,484,852 | ||||||
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Short-term debt
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3,024,800 | - | ||||||
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Income taxes payable
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490,782 | - | ||||||
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Contractor deposits
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209,376 | 183,395 | ||||||
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Contractor payables
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28,134,711 | 18,513,216 | ||||||
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Other payables
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1,113,416 | 1,151,551 | ||||||
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Other payables - related parties
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1,417,516 | 3,326,110 | ||||||
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Total current liabilities
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58,814,051 | 34,098,032 | ||||||
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NON-CURRENT LIABILITIES
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Long term debt
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18,451,280 | - | ||||||
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Deferred income
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11,473,853 | 11,236,501 | ||||||
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Total non current liabilities
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29,925,133 | 11,236,501 | ||||||
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Total liabilities
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88,739,184 | 45,334,533 | ||||||
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Commitments and Contingencies
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EQUITY:
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Shareholders' equity of the Company:
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Common stock, $0.001 par value, 250,000,000 shares authorized,
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71,333,586 issued and outstanding, respectively
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71,334 | 71,334 | ||||||
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Paid-in-capital
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18,349,908 | 18,042,189 | ||||||
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Statutory reserves
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16,465,144 | 13,217,217 | ||||||
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Retained earnings
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127,957,951 | 126,370,263 | ||||||
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Accumulated other comprehensive income
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23,393,626 | 18,262,123 | ||||||
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Total shareholders' equity of the Company
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186,237,963 | 175,963,126 | ||||||
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Noncontrolling interest
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10,500,969 | 9,812,049 | ||||||
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Total equity
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196,738,932 | 185,775,175 | ||||||
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Total liabilities and equity
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$ | 285,478,116 | $ | 231,109,708 | ||||
The accompanying notes are an integral part of this statement.
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 2010 AND 2009
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2010
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2009
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income
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$ | 5,158,716 | $ | 24,806,901 | ||||
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Adjustments to reconcile net income to cash
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provided by (used in) operating activities:
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Deferred income
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(142,070 | ) | - | |||||
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Provision for doubtful accounts
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2,349,703 | 406,795 | ||||||
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Increase (decrease) provision for obsolete inventory
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(237,632 | ) | 309,343 | |||||
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Depreciation
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2,036,280 | 2,173,251 | ||||||
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Amortization
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338,019 | 381,742 | ||||||
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Interest expense
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167,586 | 4,761 | ||||||
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(Gain) loss on sale of assets
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(63,773 | ) | 47,054 | |||||
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Loss on assets written off
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40,982 | 5,876 | ||||||
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Rental expense borne by a related party
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330,708 | 326,774 | ||||||
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(Increase) decrease in assets:
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Accounts receivable, trade - related parties
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3,411,877 | 8,308,993 | ||||||
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Other receivables
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(16,036 | ) | (184,540 | ) | ||||
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Other receivables - related parties
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9,936,038 | 1,668,812 | ||||||
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Inventories
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93,315 | 2,761,335 | ||||||
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Employee advances
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(50,112 | ) | (38,359 | ) | ||||
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Prepaid expense
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258,945 | (419,419 | ) | |||||
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Increase (decrease) in liabilities:
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Accounts payable
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8,742,972 | (1,249,152 | ) | |||||
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Advances from customers - related parties
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21,603,664 | 1,178,463 | ||||||
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Wages and benefits payable
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76,914 | (43,279 | ) | |||||
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Other taxes payable
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(2,674,295 | ) | 968,294 | |||||
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Other payables
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(74,068 | ) | (650,296 | ) | ||||
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Other payables - related parties
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9,069,853 | 3,107,699 | ||||||
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Net cash provided by operating activities
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60,357,586 | 43,871,048 | ||||||
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CASH FLOWS FROM INVESTING ACTIVITIES:
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Cash outflow arising from disposal of a subsidiary
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- | (23,975,473 | ) | |||||
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Collections from loans to local government
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- | 105,229 | ||||||
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Construction deposits
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(11,248,302 | ) | (2,664,741 | ) | ||||
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Contractor deposits
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19,306 | 19,734 | ||||||
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Addition to construction in progress
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(54,487,459 | ) | (42,734,161 | ) | ||||
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Equipment deposits
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(6,102,039 | ) | (11,782,984 | ) | ||||
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Proceeds from sales of properties
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73,650 | 29,131 | ||||||
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Purchase of equipment and automobiles
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(1,441,906 | ) | (2,009,536 | ) | ||||
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Net cash used in investing activities
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(73,186,750 | ) | (83,012,801 | ) | ||||
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CASH FLOWS FROM FINANCING ACTIVITIES:
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Loan from (repayment to) related parties
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- | (3,946,860 | ) | |||||
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Proceed from short term debt
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2,958,800 | - | ||||||
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Proceeds from long term debt
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18,048,680 | - | ||||||
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Net cash provided by (used in) financing activities
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21,007,480 | (3,946,860 | ) | |||||
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EFFECT OF EXCHANGE RATE CHANGES ON CASH
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128,878 | 82,430 | ||||||
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INCREASE (DECREASE) IN CASH
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8,307,194 | (43,006,183 | ) | |||||
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CASH, beginning of period
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1,848,328 | 44,854,511 | ||||||
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CASH, end of period
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$ | 10,155,522 | $ | 1,848,328 | ||||
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Supplemental disclosures of cash flow information
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Cash paid during the period for:
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Interest
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$ | 217,154 | $ | 105,817 | ||||
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Income taxes
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$ | 1,489,417 | $ | 3,287,531 | ||||
The accompanying notes are an integral part of this statement.
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
REVENUE BY REGION
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Twelve months ended
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December 31,
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2010
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2009
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Change
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China
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$ | 24,894,472 | $ | 27,241,333 | - 8.6 | % | ||||||
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International
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$ | 16,450,248 | $ | 34,734,736 | -52.6 | % | ||||||
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Total
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$ | 41,344,720 | $ | 61,976,069 | -33.3 | % | ||||||