Attached files
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| 8-K - CURRENT REPORT - Yew Bio-Pharm Group, Inc. | f8k040218_yewbiopharm.htm |
Exhibit 99.1
El Monte, Calif., April 2, 2018 /PRNewswire/ -- Yew Bio-Pharm Group, Inc. (“Yew Bio” or the “Company”) (OTCQB: YEWB), a major grower and seller of yew trees, yew raw materials used in the manufacture of traditional Chinese medicine, handicraft products made from yew timber and yew candle and soap made with yew essential oil in China, today reported financial results for the three- and twelve-months ended December 31, 2017.
2017 Fourth Quarter Results
Three Months Ended December 31, | Twelve Months Ended December 31, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
| Revenues: | ||||||||||||||||
| TCM Raw Materials | $ | 3,169,400 | $ | 4,703,017 | $ | 20,180,406 | $ | 28,766,815 | ||||||||
| Yew Trees | 72 | (387 | ) | 9,978 | 22,859 | |||||||||||
| Handicrafts | 45,275 | 643 | 50,559 | 98,203 | ||||||||||||
| Others | 2,280,188 | 7,297,231 | 20,298,747 | 22,460,205 | ||||||||||||
| Total Revenues | $ | 5,494,935 | $ | 12,000,504 | $ | 40,539,690 | $ | 51,348,082 | ||||||||
Total revenue for the fourth quarter of 2017 decreased 54.2% to $5.5 million from $12.0 million a year ago. Sales of TCM raw materials amounted to 57.7% of total revenues; sales of others segment consisting with yew essential oil candle, yew essential oil soap, pine needle extract, complex Taxus Cuspidate extract and composite northeast yew extract amounted to 41.5% of total revenues; sales of handicrafts amounted to 0.8% of total revenues, and sales of yew trees amounted to 0.0% of total revenues which is due to the Company’s strategy adjustment to reserve more yew trees for future TCM raw materials sales.
For the 2017 fourth quarter, gross profit was a loss of $6.8 million, compared with a loss of 1.2 million. The loss for the fourth quarter of 2017 was primarily due to adjustment of inventory and yew forest assets based on our physical inventory observation.
Operating expenses increased 460.9% to $878,089 for the 2017 fourth quarter, from $156,546 in the year-ago quarter. The increasing was primarily attributable to the increase in compensation and related benefits and Other fees.
Net income in the fourth quarter of 2016 was a loss of $7.8 million, or a loss of $0.14 per diluted share, compared with a loss of $1.4 million in the year-ago quarter, or a loss of $0.03 per diluted share.
2017 Results
Total revenues for the 2017 fiscal year were $40.5 million, a 21.0% decrease from $51.3 million a year earlier. Sales of TCM raw materials amounted to 49.8% of total revenues, sales of yew trees amounted to 0.0% of total revenues, sales of handicrafts amounted to 0.1% of total revenues and sales of others consisting with yew essential oil candle, yew essential oil soap, pine needle extract, complex Taxus Cuspidate extract and composite northeast yew extract made up the remaining 50.1%.
Gross profit was $5.1 million, or 12.5% of total revenues, for the full year, compared with $3.2 million, or 6.3% of total revenues in 2016.
Operating expenses increased 56.1% to $1.7 million for the year ended December 31, 2017, from 1.1 million a year earlier. The increasing was primarily attributable to the increases in compensation and related benefits and Other fees.
Net income for 2017 increased to $3.2 million, or 0.06 per diluted share, from $2.0 million, or $0.04 per diluted share for 2016.
“Our TCM raw materials and Others segment sales contributed most of our revenues for the year 2017,” said Mr. Zhguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group, Inc. “We developed a series of yew product derivatives such as yew oil candle, yew essential oil soap, face serum and moisturizer cosmetics which contain yew essential oil, functional pillow, complex Taxus Cuspidate extract and composite northeast yew extract since from year 2015, and these products have been accepted by more and more customers of the U.S. and Chinese market. We also established a yew product retail and experience store in San Gabriel, California in 2017, and we hope to introduce our yew products to the U.S. customers by establishing more experience stores in the future.”
“Our face serum and moisturizer cream cosmetics containing yew essential oil had formally launched to the market during the fourth quarter of 2017, and now we are working with our Chinese distributors to complete the application to export to Chinese market. We expect the application to be finished during six to nine months. Meanwhile, we are also exploring major U.S. distributors to seek listing our cosmetics on the shelf. As we announced in the earlier news, we have been through to explore the transformation of the Company’s business model from a forestry company to a high value-added manufacturer mainly utilizes the yew tree raw materials as basis. Looking ahead in 2018, we will continue to enrich our product mix and develop more value-added products for the Company, and we expect the Company to achieve sustained growth with the new business.”
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ABOUT YEW BIO-PHARM GROUP, INC
Yew Bio-Pharm Group, Inc., through its operating entity, Harbin Yew Science and Technology Development Co., Ltd. (HDS), is a major grower and seller of yew trees, yew raw materials used in the manufacture of traditional Chinese medicine (TCM) and products made from yew timber in China. Raw material from the species of yew tree that the Company grows contains taxol, and TCM containing yew raw materials has been approved as a traditional Chinese medicine in China for secondary treatment of certain cancers. The Company uses a patented, accelerated growth technology to speed the growth and maturity and commercialization of yew trees and believes that it is one of the few companies possessing a permit to sell them. Yew Bio-Pharm also recently established a division to focus on organic foods and dietary supplements with the aim of developing new business opportunities in related industries. To learn more, please visit www.yewbiopharm.com
SAFE HARBOR
This press release forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. These forward-looking statements involve a number of risks and uncertainties that could cause actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. A number of factors could cause actual results to differ materially from those contained in any forward-looking statement, including but not limited to the following: our ability to collect from our largest customers; our dependence on a small number of customers for raw materials, including a related party; our ability to continue to purchase raw materials at relatively stable prices; our dependence on a small number of customers for our yew trees for reforestation; our ability to market successfully raw materials used in the manufacture of traditional Chinese medicines; and our ability to receive continued preferential tax treatment for the sale of yew trees and potted yew trees. From time to time, these risks, uncertainties and other factors are discussed in the Company’s filings with the U.S. Securities and Exchange Commission, including its most recent annual report on Form 10-K. Yew Bio does not undertake any obligation to update any forward-looking statements as a result of new information, future events or otherwise, except as required under applicable law.
Company Contact:
Henry Pang
Yew Bio-Pharm Group, Inc.
Tel: (626) 401-9588
hpang@yewbiopharm.com
(financial tables follow)
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YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
| December 31, | ||||||||
| 2017 | 2016 | |||||||
| ASSETS | ||||||||
| CURRENT ASSETS: | ||||||||
| Cash | $ | 859,830 | $ | 278,991 | ||||
| Accounts receivable | 9,881,914 | 14,467,852 | ||||||
| Accounts receivable - related parties | 21,847,733 | 6,941,931 | ||||||
| Inventories, net | 2,579,190 | 10,296,792 | ||||||
| Prepaid expenses - related parties | 57,202 | 76,995 | ||||||
| Prepaid expenses and other assets | 37,519 | 74,783 | ||||||
| VAT recoverables | 170,564 | 1,655,954 | ||||||
| Total Current Assets | 35,433,952 | 33,793,298 | ||||||
| LONG-TERM ASSETS: | ||||||||
| Long-term inventories, net | 10,546,648 | 7,151,613 | ||||||
| Property and equipment, net | 579,557 | 692,116 | ||||||
| Land use rights and yew forest assets, net | 6,369,938 | 4,558,234 | ||||||
| Total Long-term Assets | 17,496,143 | 12,401,963 | ||||||
| Total Assets | $ | 52,930,095 | $ | 46,195,261 | ||||
| LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||
| CURRENT LIABILITIES: | ||||||||
| Accounts payable | $ | 460,202 | $ | 2,700,148 | ||||
| Accounts payable - related parties | 50,318 | 638,318 | ||||||
| Accrued expenses and other payables | 162,619 | 379,294 | ||||||
| Note payable | - | 1,156,444 | ||||||
| Taxes payable | 5,574 | 16,520 | ||||||
| Due to related parties | 619,999 | 883,596 | ||||||
| Short-term borrowings | 6,099,876 | 1,723,865 | ||||||
| Total Current Liabilities | 7,398,588 | 7,498,185 | ||||||
| NONCURRENT LIABILITIES: | ||||||||
| Deferred income | 359,646 | 120,973 | ||||||
| Total Noncurrent Liabilities | 359,646 | 120,973 | ||||||
| Total Liabilities | 7,758,234 | 7,619,158 | ||||||
| SHAREHOLDERS’ EQUITY: | ||||||||
| Common Stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 shares issued and outstanding at December 31, 2017 and 2016) | 51,875 | 51,875 | ||||||
| Additional paid-in capital | 10,363,412 | 9,654,024 | ||||||
| Retained earnings | 30,287,658 | 27,074,624 | ||||||
| Statutory reserves | 3,762,288 | 3,762,288 | ||||||
| Accumulated other comprehensive income (loss) | 706,628 | (1,966,708 | ) | |||||
| Total Shareholders’ Equity | 45,171,861 | 38,576,103 | ||||||
| Total Liabilities and Shareholders’ Equity | $ | 52,930,095 | $ | 46,195,261 | ||||
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YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
| For the Years Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
| REVENUES: | ||||||||
| Revenues | $ | 17,634,466 | $ | 22,581,267 | ||||
| Revenues - related parties | 22,905,224 | 28,766,815 | ||||||
| Total Revenues | 40,539,690 | 51,348,082 | ||||||
| COST OF REVENUES: | ||||||||
| Cost of revenues | 17,810,948 | 24,688,860 | ||||||
| Cost of revenues - related parties | 17,666,765 | 23,424,644 | ||||||
| Total Cost of Revenues | 35,477,713 | 48,113,504 | ||||||
| GROSS PROFIT | 5,061,977 | 3,234,578 | ||||||
| OPERATING EXPENSES: | ||||||||
| Selling | 86,633 | 34,828 | ||||||
| General and administrative | 1,650,690 | 1,078,392 | ||||||
| Total Operating Expenses | 1,737,323 | 1,113,220 | ||||||
| INCOME FROM OPERATIONS | 3,324,654 | 2,121,358 | ||||||
| OTHER INCOME (EXPENSES): | ||||||||
| Interest expense | (225,023 | ) | (140,844 | ) | ||||
| Other income (expense) | (33,961 | ) | 3,853 | |||||
| Exchange gains | 147,978 | 40,533 | ||||||
| Total Other Expenses | (111,006 | ) | (96,458 | ) | ||||
| INCOME BEFORE PROVISION FOR INCOME TAXES | 3,213,648 | 2,024,900 | ||||||
| PROVISION FOR INCOME TAXES | (614 | ) | (18,009 | ) | ||||
| NET INCOME | $ | 3,213,034 | $ | 2,006,891 | ||||
| COMPREHENSIVE INCOME (LOSS): | ||||||||
| NET INCOME | $ | 3,213,034 | $ | 2,006,891 | ||||
| OTHER COMPREHENSIVE INCOME (LOSS): | ||||||||
| Foreign currency translation adjustment | 2,673,336 | (2,632,390 | ) | |||||
| COMPREHENSIVE INCOME (LOSS) | $ | 5,886,370 | $ | (625,499 | ) | |||
| NET INCOME PER COMMON SHARE: | ||||||||
| Basic | $ | 0.06 | $ | 0.04 | ||||
| Diluted | $ | 0.06 | $ | 0.04 | ||||
| WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: | ||||||||
| Basic | 51,875,000 | 51,875,000 | ||||||
| Diluted | 53,934,497 | 51,875,000 | ||||||
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YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
| For the Years Ended December 31, | ||||||||
| 2017 | 2016 | |||||||
| CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
| Net income | $ | 3,213,034 | $ | 2,006,891 | ||||
| Adjustments to reconcile net income to net cash provided by (used in) operating activities: | ||||||||
| Depreciation | 67,790 | 112,282 | ||||||
| Amortization of land use rights and yew forest assets | 3,678,972 | 8,819,008 | ||||||
| Stock-based compensation | 709,388 | 31,466 | ||||||
| Inventory write-down | - | 2,499,563 | ||||||
| Changes in operating assets and liabilities: | ||||||||
| Accounts receivable | 5,349,595 | (11,345,374 | ) | |||||
| Accounts receivable - related parties | (13,903,716 | ) | (915,034 | ) | ||||
| Prepaid and other current assets | 40,202 | (13,435 | ) | |||||
| Prepaid expenses - related parties | 23,055 | 23,440 | ||||||
| Inventories, net | 850,356 | (4,080,175 | ) | |||||
| VAT recoverables | 1,537,471 | (1,047,212 | ) | |||||
| Accounts payable | (2,325,337 | ) | 2,807,954 | |||||
| Accounts payable - related parties | (607,503 | ) | 626,557 | |||||
| Accrued expenses and other payables | (195,047 | ) | 362,600 | |||||
| Due to related parties | (58,417 | ) | 9,635 | |||||
| Note payable | (1,210,833 | ) | 615,408 | |||||
| Deferred income | 221,992 | 126,392 | ||||||
| Taxes payable | (11,271 | ) | 3,065 | |||||
| NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES | (2,620,269 | ) | 643,031 | |||||
| CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
| Change in restricted cash | - | 296,419 | ||||||
| Purchase of property and equipment | - | (61,509 | ) | |||||
| Purchase of land use rights and yew forest assets | (799,070 | ) | - | |||||
| NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES | (799,070 | ) | 234,910 | |||||
| CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
| Proceeds from short-term borrowings | 10,940,220 | 1,809,189 | ||||||
| Repayments of short-term borrowings | (6,844,634 | ) | (3,022,055 | ) | ||||
| Proceeds from related party | - | 81 | ||||||
| Repayments to related parties | (170,875 | ) | (49,030 | ) | ||||
| NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES | 3,924,711 | (1,261,815 | ) | |||||
| EFFECT OF EXCHANGE RATE ON CASH | 75,467 | (18,743 | ) | |||||
| NET INCREASE (DECREASE) IN CASH | 580,839 | (402,617 | ) | |||||
| CASH - Beginning of the year | 278,991 | 681,608 | ||||||
| CASH - End of the year | $ | 859,830 | $ | 278,991 | ||||
| SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | ||||||||
| Cash paid for: | ||||||||
| Interest | $ | 189,403 | $ | 145,452 | ||||
| Income taxes | $ | 18,328 | $ | 24,451 | ||||
| NON-CASH INVESTING AND FINANCING ACTIVITIES | ||||||||
| Operating expense paid by related party | $ | 38,140 | $ | 88,088 | ||||
| Property and equipment paid by related party | $ | - | $ | 82,491 | ||||
| Settlement of due to related party with property and equipment | $ | 82,491 | $ | - | ||||
| Reclassification of inventories to land use rights and yew forest assets | $ | 4,331,025 | $ | - | ||||
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