TBV Tiens Biotech Grp. (Usa) Common Stock

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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