NEW YORK, May 15 /PRNewswire-Asia/ -- Tiens Biotech Group (USA), Inc. , http://www.tiens-bio.com , today announced financial results for the first quarter ended March 31, 2009.
Revenue for the first quarter of 2009 increased 42% to $18.2 million, compared to $12.8 million for the first quarter of 2008, reflecting a significant increase in international sales.
Net income attributable to the Company for the quarter rose 138.1% to $8.6 million, or $0.12 per share, compared to net income of $3.6 million, or $0.05 per share, for the 2008 first quarter.
For the first quarter of 2009, international revenue increased to $15.5 million, or 130.7% over $6.7 million for the same period in 2008, mainly due to greater sales in Indonesia and Vietnam. Additionally, export restrictions have been reduced since China's Administration of Quality Supervision, Inspection and Quarantine ended in late 2008 its national campaign against unsafe food and substandard products, which began in August 2007.
For the first quarter of 2009, revenue in China was $2.7 million, a 55.1% decrease from $6.1 million for the same period in 2008. This decrease of domestic revenue was due to the decrease of orders for wellness products, which management believes was due to customers stocking up on certain products during the third quarter of 2008 as a result of the price increase announcement by, Tianjin Tianshi Biological Engineering Co., Ltd. ("Tianshi Engineering") the affiliated company which markets and sells Tiens' products in China, during that quarter.
Cost of sales for the first quarter of 2009 increased to $5.7 million, an increase of 42% compared to $4.0 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 first quarter of 2009 was $12.5 million, an increase of 42.4% compared to $8.8 million for the same period in 2008. This increase reflects the slightly lower rate of increase of cost of sales compared with that of revenue.
Selling, general and administrative expenses were $3.1 million for the first quarter of 2009, a decrease of 3.6% compared to $3.2 million for the same period in 2008. The decrease was primarily due to decreases in salary expenses as a result of salary reductions and reduced headcount and business tax expenses. The selling and administrative expenses as a percentage of sales declined to 17.2% in the 2009 first quarter from 25.3% for the same period in 2008.
In China, Tiens sells its products to 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 March 31, 2009, Tiens had $114.9 million of retained earnings and total shareholders' equity of $157.8 million.
Jinyuan Li, Chairman, President and CEO of Tiens, said, "We are pleased to report positive results which include significant increases in total revenue, net income and international revenue, and are confident that international sales will continue to be strong. As the decline in sales in China reflects customers buying in greater volume prior to a price increase, we are optimistic that domestic sales will return to, and potentially exceed, previous levels as customers begin to replenish stored up products. Tiens remains committed to gaining greater market share in China, continuing to expand our growing international customer base, 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. 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, Tianjin Tianshi Biological Engineering Co., Ltd. ("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."
CONTACT: Investor Relations, Tiens Biotech Group (USA), Inc., +86-22-
8213-3491, Fax: +86-22-8213-7914, firstname.lastname@example.org; or Carl Hymans of
G. S. Schwartz & Co., +1-212-725-4500, Fax: +1-212-725-9188,
Web site: http://www.tiens-bio.com/