Second Quarter Revenue Increased 5% -- Six Months Revenue Rose 13%
NEW YORK, Aug. 22 /PRNewswire-FirstCall/ --
Tiens Biotech Group (USA), Inc. ("the Company" or "Tiens USA"), (AMEX:TBV), http://www.tiens-bio.com/, which operates primarily through its subsidiary Tianjin Tianshi Biological Development Co., Ltd ("Biological"), announced financial results for the second quarter and six months ended June 30, 2005.
Revenue for the second quarter ended June 30, 2005 increased approximately 5% to $17,307,659, from $16,526,193 for the second quarter ended June 30, 2004.
Net income for the second quarter ended June 30, 2005 was $7,594,920, compared to net income of $8,828,899 for the second quarter ended June 30, 2004. Earnings per share for the second quarter ended June 30, 2005 were $0.11, with weighted average number of shares outstanding of 71,333,586 compared to $0.12, with weighted average number of shares outstanding of 71,998,586 for the comparable period of 2004.
Revenue for the six months ended June 30, 2005 increased by $3,587,771, approximately 13% to $31,603,658 from $28,015,887 for the six months ended June 30, 2004.
The reasons for the increase are detailed below and discussed in terms of domestic and international revenues. Revenue is categorized into revenue from domestic and international sales as follows.
Revenue Six Months Ended June 30,
------------------ -------------------------------
2005 2004 Increase in %
----------- ----------- --------------
Domestic $18,313,400 $17,238,110 6%
------------------ ----------- ----------- --------------
International $13,290,258 $10,777,777 23%
------------------ ----------- ----------- --------------
Domestic sales for the six months ended June 30, 2005 increased 6% compared to the corresponding period in 2004. This increase was mainly due to continuously increasing networking sales forces in China, the establishment of 70 new branches, and the expansion of the Company's market share in markets in which it is involved.
Our international sales for the six months ended June 30, 2005, increased by 23% from the corresponding period of 2004. This increase in international sales is mainly comprised of the sales increase of the Company's branches in Greece, the Ukraine and Kenya.
The Company believes that this increase was primarily due to the successful marketing of its products internationally since the end of 2002, and a continued growth in worldwide demand for its products. During the fiscal year 2004, the Company experienced a significant sales growth in overseas markets, and this growth was maintained during the first six months of fiscal 2005.
Net income for the six months ended June 30, 2005 was $13,200,199, compared to net income of $15,241,245 for the six months ended June 30, 2004. Earnings per share for the six months ended June 30, 2005 were $0.19, with weighted average number of shares outstanding of 71,333,586, compared to $0.21, with weighted average number of shares outstanding of 71,998,586 for the six months ended June 30, 2004.
The decrease in net income was due primarily to the provision of $1,445,445 for income taxes and $687,164 of other expense. The increase in provision for income taxes was the result of Tiens becoming subject to an annual income tax rate of 7.5%. According to Chinese tax regulation, Tiens was fully exempted from PRC income taxes in 2003 and 2004, and became subject to income tax at a reduced rate of 7.5% in 2005 through 2007. From 2008 onwards, the Company will be subject to a 15% income tax.
One of the two main items contained in other expense was a one-time charge of $328,441 of additional taxes and penalties paid by Biological to the PRC government during the first quarter in 2005 as the result of a VAT examination by the local government. Another item was $266,433 of interest accrued for the first six months of the 2005 fiscal year according to terms of the long- term loan agreement between Tian Yuan Investment Ltd. and the Company.
Consolidated gross profit increased by $2,550,007 for the six months ended June 30, 2005, compared to the corresponding period in 2004. Tiens maintained a 76% gross profit margin for the six months ended June 30, 2005, the same as the comparable period of 2004. Tiens' ability to generate significant gross profit margins reflects management's ability to control costs while continuing to increase sales.
Cost of Goods Sold as a percentage of sales for the second quarter and six months ended June 30, 2005 remained 24%, the same percentage as the second quarter and six months ended June 30, 2004. The consistency in cost of goods sold as a percentage of sales reflects Tiens' focus on controlling costs.
Selling, general and administrative expenses increased by $2,480,632 for the six months ended June 30, 2005 from the corresponding period in 2004. The selling, general and administrative expenses as a percentage of sales increased to 16% for the six months ended June 30, 2005. This increase primarily reflects, the increased contribution to the further development of new products, increases in salary expense due to new hires and a corresponding increase in the provision of new office space, fees associated with the use of professional consulting firms for the recruitment of new employees and the transfer of four manufacturing workshops from Tianshi Group to Biological Development.
As of June 30, 2005, Tiens had $55,401,139 of retained earnings, cash of $50,990,760 and total shareholders' equity of $73,724,097.
Jinyuan Li, Chairman, President and CEO of Tiens Biotech Group (USA), Inc., said, "We are very pleased with our second quarter results. The increase in sales lends further credence to the ability of Tiens USA to expand the growing customer base for our unique nutrition supplement and personal care products and the success of our strategic global marketing initiatives."
"We are extremely optimistic in our long-term outlook for the Company. We remain committed to maintaining the highest level of quality for all of our products and are confident that we will continue to generate greater sales in domestic and international markets as we strive to further enhance our shareholder value," concluded Mr. Li.
About Tiens Biotech Group (USA), Inc., http://www.tiens-bio.com/
Tiens Biotech Group (USA), Inc. conducts its main business operations through its 80% owned subsidiary Tianjin Tianshi Biological Development Co., Ltd. ("Biological"), which is based in Tianjin, People's Republic of China (PRC). Biological primarily engages in the research, development, manufacturing, and marketing of nutrition supplement products, including wellness products and dietary supplement products, and personal care products. Tiens USA derives its revenues principally from product sales to affiliated companies in China and outside of China. Since its establishment, Biological has developed and produced seven major product series, of which six are comprised of nutrition supplement products, and the seventh is comprised of personal care products. Biological 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. Biological has obtained all required certificates and approvals from government regulatory agencies to manufacture and sell its products in China.
In China, Biological conducts the marketing and sales of its products through its affiliated company, Tianjin Tianshi Biological Engineering Co., Ltd. ("Tianshi Engineering"), a company incorporated in China. Tianshi Engineering markets and sells Biological's products in China through its 23 branches, representative offices and chain stores, and nine domestic affiliated companies. Outside of China, Biological sells its products through an extensive direct sales force, or multi-level marketing sales force, of overseas affiliates located in approximately 90 countries and independent distributors who use the products themselves and/or resell them to other distributors or consumers. Our direct sales marketing program is subject to governmental regulation in each of these countries.
Tiens Biotech Group (USA), Inc. (AMEX:TBV) is a corporation organized under the laws of the State of Delaware.
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, including the Company's financial results for the six months ended June 30, 2005, 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 Tiens Biotech Group (USA), Inc. ("the Company"), or industry results, 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 the Company's ability to: (i) obtain sufficient capital or a strategic business arrangement to fund its expansion plans; (ii) 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; and (iv) 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 SIX MONTHS ENDED JUNE 30, 2005 AND 2004
3 months ended June 30 6 months ended June 30
----------------------- -----------------------
2005 2004 2005 2004
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
------------ ------------ ------------ ------------
REVENUE - RELATED
PARTIES $ 17,307,659 $ 16,526,193 $ 31,603,658 $ 28,015,887
COST OF SALES 4,197,812 3,888,329 7,655,230 6,617,466
------------ ------------ ------------ ------------
GROSS PROFIT 13,109,847 12,637,864 23,948,428 21,398,421
SELLING, GENERAL
AND
ADMINISTRATIVE
EXPENSES 2,465,676 1,480,224 5,099,551 2,618,919
------------ ------------ ------------ ------------
INCOME FROM
OPERATIONS 10,644,171 11,157,640 18,848,877 18,779,502
OTHER INCOME
(EXPENSE), NET (224,103) 13,946 (687,164) 317,703
------------ ------------ ------------ ------------
INCOME BEFORE
PROVISION FOR
INCOME TAXES
AND MINORITY
INTEREST 10,420,068 11,171,586 18,161,713 19,097,205
PROVISION FOR
INCOME TAXES 829,185 -- 1,445,445 --
------------ ------------ ------------ ------------
INCOME BEFORE
MINORITY
INTEREST 9,590,883 11,171,586 16,716,268 19,097,205
MINORITY INTEREST 1,995,963 2,342,687 3,516,069 3,855,960
------------ ------------ ------------ ------------
NET INCOME 7,594,920 8,828,899 13,200,199 15,241,245
OTHER
COMPREHENSIVE
INCOME
Foreign
currency
translation
adjustment 999 -- 999 --
------------ ------------ ------------ ------------
COMPREHENSIVE
INCOME $ 7,595,919 $ 8,828,899 $ 13,201,198 $ 15,241,245
============ ============ ============ ============
Weighted average
number of shares
outstanding 71,333,586 71,998,586 71,333,586 71,998,586
============ ============ ============ ============
Earnings per
share, basic
and diluted $ 0.11 $ 0.12 $ 0.19 $ 0.21
============ ============ ============ ============
TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2005 AND DECEMBER 31, 2004
A S S E T S
-----------
June 30 December 31
2005 2004
------------ -------------
(Unaudited) (Audited)
------------ -------------
CURRENT ASSETS:
Cash $ 50,990,760 $ 39,243,872
Accounts receivable - related parties,
net of allowance for doubtful
accounts of $30,442 at June 30, 2005
and $30,442 at December 31, 2004,
respectively 5,702,133 6,058,021
Other receivables 327,963 529,036
Other receivables and note receivable
- related parties 7,207,506 8,144,740
Inventories 8,866,290 4,567,418
------------ -------------
Total current assets 73,094,652 58,543,087
------------ -------------
BUILDINGS, EQUIPMENT AND AUTOMOBILES, net 22,638,072 20,200,806
------------ -------------
OTHER ASSETS:
Intangible assets, net 518,773 469,765
Employee advances 195,721 75,212
Deposits 5,159,178 4,230,063
------------ -------------
Total other assets 5,873,672 4,775,040
------------ -------------
Total assets $ 101,606,396 $ 83,518,933
============= =============
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
-------------------------------------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 4,977,166 $ 1,791,019
Accounts payable - related party 217,452 209,199
Advances from customers - related parties 1,402,850 673,349
Other taxes payable 1,069,025 623,113
Accrued liabilities 632,908 428,839
Other payable - related parties 775,641 945,274
Distribution payable to minority interest
shareholder 3,023,211 --
Current portion of long term debt 27,727 155,442
Total current liabilities 12,125,980 4,826,235
NON-CURRENT LIABILITIES:
Note payable - related party 10,657,742 10,657,742
------------ -------------
Total liabilities 22,783,722 15,483,977
------------ -------------
MINORITY INTEREST 5,098,577 7,512,057
------------ -------------
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 55,401,139 42,200,940
Accumulated other comprehensive (loss) (11,168) (12,167)
------------ -------------
Total shareholders' equity 73,724,097 60,522,899
------------ -------------
Total liabilities and shareholders'
equity
$ 101,606,396 $ 83,518,933
============= =============
DATASOURCE: Tiens Biotech Group (USA), Inc.
CONTACT: Investor Relations - Tiens Biotech Group (USA), Inc.,
+86-22-8213-7658, or Fax: +86-22-8213-7667, ; or Carl
Hymans of G. S. Schwartz & Co., Tel: +1-212-725-4500, or Fax:
+1-212-725-9188,
Web site: http://www.tiens-bio.com/