NEW YORK, Nov. 11 /PRNewswire-FirstCall/ -- Tiens Biotech Group (USA), Inc. (“the Company” or “Tiens USA”), , http://www.tiens-bio.com, which operates primarily through its subsidiary Tianjin Tianshi Biological Development Co., Ltd (“Biological”), announced financial results for the third quarter and nine months ended September 30, 2005.
Revenue for the third quarter ended September 30, 2005 increased approximately 6% to $19,126,809, from $18,058,888 for the third quarter ended September 30, 2004, and 11% from the $17,307,659 reported for the second quarter of 2005. This increase in sales is due to the growing acceptance of Tiens’ products worldwide.
Net income for the third quarter ended September 30, 2005 was $8,204,744, compared to net income of $9,194,645 for the third quarter ended September 30, 2004, and $7,594,920 for the second quarter of 2005. Earnings per share for the third quarter ended September 30, 2005 were $0.14 on weighted average shares outstanding of 71,333,586, compared to $0.13, on weighted average shares outstanding of 71,872,975 for the third quarter of 2004, and $0.11 on weighted average shares outstanding of 71,333,586, for the second quarter of 2005.
Revenue for the nine months ended September 30, 2005 increased approximately 10% to $50,730,467 from $46,074,775 for the nine months ended September 30, 2004.
Net income for the nine months ended September 30, 2005 was $21,404,943, compared to net income of $24,435,892 for the nine months ended September 30, 2004. Earnings per share for the nine months ended September 30, 2005 were $0.33 on weighted average shares outstanding of 71,333,586, compared to $0.34 on weighted average shares outstanding of 71,957,327 for the nine months ended September 30, 2004.
Reasons for the revenue increases are detailed below and discussed in terms of domestic and international revenues.
Revenue Third Quarter Ended September 30, ---------- --------------------------------------- 2005 2004 Increase in % ----------------------- ------------- Domestic $9,181,333 $6,183,549 48% -------------- -------------------------- ------------ International $9,945,476 $11,875,339 (16)% -------------- -------------------------- ------------ Revenue Nine Months Ended September 30, ---------- --------------------------------------- 2005 2004 Increase in % ----------------------- ------------- Domestic $27,494,733 $23,421,659 17% -------------- -------------------------- ------------ International $23,235,734 $22,653,116 3% -------------- -------------------------- ------------
For the nine months ended September 30, 2005, domestic sales increased 17% compared to the corresponding period in 2004. This increase was mainly due to the expansion of the Company’s market share in key geographic markets including areas in Northern and Eastern China. In the international market, increased sales were attained in Africa and Russia.
The decrease in net income was due primarily to the provision of $2,315,214 for income taxes and $814,133 of other expense. The increase in provision for income taxes was the result of Tianjin Tianshi Biological Development Co., Ltd. (“Biological”), Tiens’ USA’s 80% owned subsidiary, becoming subject to an annual income tax rate of 7.5%. According to Chinese tax regulation, Biological was fully exempted from People’s Republic of China (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, Biological 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 the $563,546 of interest expense incurred by Tianshi International Holding Group Ltd., Tiens’ wholly-owned subsidiary, according to the terms of its long-term loan agreement with Tian Yuan Investment Ltd, of which $429,230 was paid, and the remaining balance was accrued.
Consolidated gross profit increased by $418,363 for the third quarter ended September 2005 and $2,968,370 for the nine months ended September 30, 2005 respectively, compared to the corresponding period in 2004. Tiens USA’s gross profit margin was 74% and 75% respectively for the third quarter and nine months ended September 30, 2005, compared to 76% and 76% for the comparable periods of 2004 and 76% for the second quarter of 2005. Tiens USA’s 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 third quarter and nine months ended September 30, 2005 were 26% and 25%, respectively, compared to 24% and 24% for the third quarter and nine months ended September 30, 2004 and 24% for the second quarter of 2005. The consistency in cost of goods sold as a percentage of sales reflects Tiens USA’s focus on controlling costs.
Selling, general and administrative expenses increased by $2,838,998 for the nine months ended September 30, 2005 from the corresponding period in 2004. The selling, general and administrative expenses as a percentage of sales increased to 16% for the nine months ended September 30, 2005. This increase primarily reflects increases in salary expense due to new hires and a corresponding increase in low cost supplies.
As of September 30, 2005, Tiens USA had $63,605,883 of retained earnings, cash of $52,006,277 and total shareholders’ equity of $83,976,688.
Jinyuan Li, Chairman, President and CEO of Tiens Biotech Group (USA), Inc., said, “We are pleased to have generated increased sales for the third quarter which reflect Tiens USA’s ability to further capitalize on the growing worldwide demand for our unique nutrition supplement and personal care products. We believe that by maintaining the highest level of quality for all of our products, continuing to invest in the company’s growth, including the development of new products with broad customer appeal, we will continue to grow sales in domestic and international markets and enhance future shareholder value. We remain extremely optimistic in our long-term outlook for the Company.”
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 67 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. 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 nine months ended September 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.”
-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, 2005 AND 2004 3 months ended 9 months ended September 30 September 30 -------------------------------------------- 2005 2004 2005 2004 (Unaudited) (Unaudited) (Unaudited) (Unaudited) ----------- ---------- ------------ ----------- REVENUE - RELATED PARTIES $ 19,126,809 $ 18,058,888 $ 50,730,467 $ 46,074,775 COST OF SALES 4,954,198 4,304,640 12,609,428 10,922,106 ----------- ----------- ------------ ----------- GROSS PROFIT 14,172,611 13,754,248 38,121,039 35,152,669 SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,795,414 2,437,047 7,894,965 5,055,967 ----------- ----------- ------------ ----------- INCOME FROM OPERATIONS 11,377,197 11,317,201 30,226,074 30,096,702 OTHER INCOME (EXPENSE), NET (126,969) 205,357 (814,133) 523,063 ----------- ----------- ------------ ----------- INCOME BEFORE PROVISION FOR INCOME TAXES AND MINORITY INTEREST 11,250,228 11,522,558 29,411,941 30,619,765 PROVISION FOR INCOME TAXES 869,769 - 2,315,214 - ----------- ----------- ------------ ----------- INCOME BEFORE MINORITY INTEREST 10,380,459 11,522,558 27,096,727 30,619,765 MINORITY INTEREST 2,175,715 2,327,913 5,691,784 6,183,873 ----------- ----------- ------------ ----------- NET INCOME 8,204,744 9,194,645 21,404,943 24,435,892 OTHER COMPREHENSIVE INCOME Foreign currency translation adjustment 2,047,847 - 2,048,846 - ----------- ----------- ------------ ----------- COMPREHENSIVE INCOME $10,252,591 $9,194,645 $23,453,789 $ 24,435,892 =========== =========== ============ =========== Weighted average number of shares outstanding 71,333,586 71,872,975 71,333,586 71,957,327 =========== =========== ============ =========== Earnings per share, basic and diluted $0.14 $0.13 $0.33 $0.34 =========== =========== ============ =========== TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2005 AND DECEMBER 31, 2004 A S S E T S September 30, December 31, 2005 2004 (Unaudited) (Audited) Difference % CURRENT ASSETS: Cash $52,006,277 $39,243,872 12,762,405 33% Accounts receivable - related party, net of allowance for doubtful 5,313,533 6,058,021 (744,488) -12% accounts of $31,145 at September 30, 2005 and $30,442 at December 31, 2004, respectively Other receivables 32,108 529,036 (496,928) -94% Other receivables and note receivable - related parties 15,128,016 8,144,740 6,983,276 86% Inventories 9,059,319 4,567,418 4,491,901 98% Total current assets 81,539,253 58,543,087 22,996,166 39% BUILDINGS, EQUIPMENT AND AUTOMOBILES, net 24,387,551 20,200,806 4,186,745 21% OTHER ASSETS: Intangible asset, net 499,805 469,765 30,040 6% Employee advances 498,293 75,212 423,081 563% Deposits 5,760,974 4,230,063 1,530,911 36% Total other assets 6,759,072 4,775,040 1,984,032 42% Total assets $112,685,876 $83,518,933 29,166,943 35% TIENS BIOTECH GROUP (USA), INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS AS OF SEPTEMBER 30, 2005 AND DECEMBER 31, 2004 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 September 30, December 31, 2005 2004 (Unaudited) (Audited) Difference % CURRENT LIABILITIES: Accounts payable $3,279,324 $1,791,019 1,488,305 83% Accounts payable - related party 247,244 209,199 38,045 18% Advances from customers - related parties 742,956 673,349 69,607 10% Other taxes payable 1,357,539 623,113 734,426 118% Accrued liabilities 715,464 428,839 286,625 67% Other payable - related parties 1,349,833 945,274 404,559 43% Distribution Payable to minority interest shareholders 3,084,796 - 3,084,796 Current portion of long term debt 0 155,442 (155,442) -100% Total current liabilities 10,777,156 4,826,235 5,950,921 123% NON-CURRENT LIABILITIES: Note payable - related party 10,657,742 10,657,742 0 0% Total liabilities 21,434,898 15,483,977 5,950,921 38% MINORITY INTEREST 7,274,290 7,512,057 (237,767) -3% SHAREHOLDERS’ EQUITY: Common stock, $0.001 par value, 260,000,000 shares authorized, 71,333,586 issued and outstanding, respectively 71,334 71,334 - 0% Paid-in-capital 8,842,009 8,842,009 0% Statutory reserves 9,420,783 9,420,783 (0) 0% Retained earnings 63,605,883 42,200,940 21,404,943 51% Accumulated other comprehensive income (loss) 2,036,679 (12,167) 2,048,846 -16839% Total shareholders’ equity 83,976,688 60,522,899 23,453,789 39% Total liabilities and shareholders’ equity $112,685,876 $83,518,933 29,166,943 35% CONTACT: Investor Relations Carl Hymans Tiens Biotech Group (USA), Inc G. S. Schwartz & Co. Tel: 0086-22-8213-7335 Tel: 212-725-4500 Fax: 0086-22-8213-7667 Fax: 212-725-9188 Email: investor@tiens-bio.com Email: carlh@schwartz.comhttp://www.tiens-bio.com
Tiens Biotech Group
CONTACT: Investor Relations, Tiens Biotech Group (USA), 0086-22-8213-7335, Fax: 0086-22-8213-7667, investor@tiens-bio.com; or Carl Hymans of G.S. Schwartz & Co., +1-212-725-4500, Fax: 212-725-9188, carlh@schwartz.com,for Tiens Biotech Group
Web site: http://www.tiens-bio.com/
