Yew Bio-Pharm Group Reports 2017 Third Quarter Financial Results

EL MONTE, Calif., Nov. 13, 2017 /PRNewswire/ -- Yew Bio-Pharm Group, Inc., (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 essence oil in China, today reported financial results for the three- and nine-months ended September 30, 2017.

 2017 Third Quarter Results Three Months Ended Increase Percentage September 30, ------------- 2017 2016 (Decrease) Change ---- ---- --------- ------ TCM raw materials $2,939,959 $6,873,988 $(3,934,029) (57.23)% Yew trees 9,906 - 9,906 0.00% Handicrafts 2,916 1,087 1,829 168.26% Others 8,612,134 7,792,024 820,110 10.52% --------- --------- ------- ----- Total $11,564,915 $14,667,099 $(3,102,184) (21.15)% =========== =========== =========== ======= 

Total revenues for the third quarter of 2017 decreased 21.2% to $11.6 million from $14.7 million a year ago. Sales of TCM raw materials amounted to 25.4% of total revenues; sales of yew trees amounted to 0% of total revenues; sales of handicrafts amounted to 0% of total revenues; and sales of others, mainly consisting with yew candles, pine needle extract and essential oil soaps amounted to 74.6% of total revenues.

For the 2017 third quarter, gross profit was $749,916, or 6.5% of total revenues, compared with $1.4 million, or 9.7% of total revenues for the comparable 2016 quarter. The decrease in overall gross profit margin was primarily attributable to the lower gross margin yields of Others segment.

Operating expenses decreased 12.9% to $260,916 for the quarter ended September 30, 2017, from $299,517 in the year-ago quarter. The decreasing was primarily attributable to the decrease in depreciation and professional fees.

Net income for the three months ended September 30, 2017 decreased 43.1% to $614,407 from $1.1 million in the same quarter last year. Earnings per diluted share for the three months ended September 30, 2017 was $0.01, as compared to $0.02 for the same quarter of last year.

 Nine Months 2017 Financial Results Nine Months Ended Increase Percentage September 30, ------------- 2017 2016 (Decrease) Change ---- ---- --------- ------ TCM raw materials $17,011,006 $24,063,798 $(7,052,792) (29.31)% Yew trees 9,906 23,246 (13,340) (57.39)% Handicrafts 5,284 97,560 (92,276) (94.58)% Others 18,018,559 15,162,974 2,855,585 18.83% ---------- ---------- --------- ----- Total $35,044,755 $39,347,578 $(4,302,823) (10.94)% =========== =========== =========== ======= 

Total revenues for the nine months of 2017 decreased 10.9% to $35.0 million from $39.3 million a year ago. Sales of TCM raw materials amounted to 48.5% of total revenues; sales of yew trees amounted to 0% of total revenues; sales of handicrafts amounted to 0% of total revenues; and sales of others, mainly consisting with yew candles, pine needle extract and essential oil soaps, amounted to 51.5% of total revenues.

Gross profit was $11.9 million, or 33.8% of total revenues, compared with $4.5 million, or 11.3% of total revenues for the comparable 2016 quarter. The increase in the gross profit margin was primarily attributable to the higher gross margin yields of TCM raw materials.

Operating expenses decreased 10.2% to $859,234 for the nine months ended September 30, 2017, from $956,674 for the same period last year. The decreasing was primarily attributable to the decreases in depreciation, professional fees and Other.

Net income for the nine months of 2017 increased 221.2% to $11.0 million from $3.4 million for the same period last year. Earnings per diluted share was $0.20, as compared to $0.07 for the same period last year.

“The sales of yew candles, pine needle extract and essential oil soaps maintained a stable growth for the third quarter and also the past nine months of 2017, as compared with the same periods of 2016,” said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group, Inc. “These yew essential oil derivative products such as yew candle and soap have contributed a great portion of overall revenues for the Company since year 2016. We are actively transforming our business type from agriculture-focused to a more diversified business model.”

“Our two cosmetic products, which include with yew essential oil, have finished production and will be launched to the U.S. market before the year end. We would like to use these two products to introduce the benefits of our yew essential oil to the U.S. consumers, as the cosmetic products would be more popular and common for people to use. Meanwhile, our two coffee products, wood ear coffee and pine needle coffee, have been formally launched to the U.S. market early of November, and the products have started to be sold at Shun Fat Supermarket, San Gabriel Superstore, California. We believe these newly added products will greatly enrich our product mixes and become new sources of revenues for the Company.”

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 Contacts:
Henry Pang
Yew Bio-Pharm Group, Inc.
Tel: (626) 401-9588
hpang@yewbiopharm.com

 YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS September 30, December 31, 2017 2016 ---- ---- (Unaudited) ASSETS CURRENT ASSETS: Cash $1,339,673 $278,991 Accounts receivable 11,743,961 14,467,852 Accounts receivable - related parties 18,499,561 6,941,931 Inventories, net 9,362,578 10,296,792 Prepaid expenses - related party 61,030 76,035 Prepaid expenses and other assets 92,442 75,743 VAT recoverables 622,134 1,655,954 ------- --------- Total Current Assets 41,721,379 33,793,298 ---------- ---------- LONG-TERM ASSETS: Long-term inventories, net 7,730,893 7,151,613 Property and equipment, net 583,542 692,116 Land use rights and yew forest assets, net 9,823,740 4,558,234 --------- --------- Total Long-term Assets 18,138,175 12,401,963 ---------- ---------- Total Assets $59,859,554 $46,195,261 =========== =========== LIABILITIES AND SHAREHOLDERS’ EQUITY CURRENT LIABILITIES: Accounts payable $1,076,485 $2,700,148 Accounts payable - related parties 49,198 638,318 Accrued expenses and other payables 153,408 379,294 Notes payable 1,206,702 1,156,444 Taxes payable 4,886 16,520 Due to related parties 678,410 883,596 Short-term borrowings 4,758,689 1,723,865 --------- --------- Total Current Liabilities 7,927,778 7,498,185 --------- --------- NOCURRENT LIABILITY: Deferred income 351,642 120,973 ------- ------- Total Noncurrent Liabilities 351,642 120,973 ------- ------- Total Liabilities 8,279,420 7,619,158 --------- --------- SHAREHOLDERS’ EQUITY: Common Stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 shares 51,875 51,875 issued and outstanding at September 30, 2017 and December 31, 2016) Additional paid-in capital 9,748,201 9,654,024 Retained earnings 38,114,448 27,074,624 Statutory reserves 3,762,288 3,762,288 Accumulated other comprehensive loss (96,678) (1,966,708) ------- ---------- Total Shareholders’ Equity 51,580,134 38,576,103 ---------- ---------- Total Liabilities and Shareholders’ Equity $59,859,554 $46,195,261 =========== =========== 

 YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (UNAUDITED) For the Three Months For the Nine Months Ended September 30, Ended September 30, ------------------- ------------------- 2017 2016 2017 2016 ---- ---- ---- ---- REVENUES: Revenues $7,272,296 $7,793,111 $16,681,089 $15,283,780 Revenues - related parties 4,292,619 6,873,988 18,363,666 24,063,798 --------- --------- ---------- ---------- Total Revenues 11,564,915 14,667,099 35,044,755 39,347,578 ---------- ---------- ---------- ---------- COST OF REVENUES: Cost of revenues 7,371,663 7,650,346 16,731,726 15,085,190 Cost of revenues - related parties 3,443,336 5,597,721 6,453,470 19,800,134 --------- --------- --------- ---------- Total Cost of Revenues 10,814,999 13,248,067 23,185,196 34,885,324 ---------- ---------- ---------- ---------- GROSS PROFIT 749,916 1,419,032 11,859,559 4,462,254 ------- --------- ---------- --------- OPERATING EXPENSES: Selling 64,347 5,667 64,678 17,754 General and administrative 196,569 293,850 794,556 938,920 ------- ------- ------- ------- Total Operating Expenses 260,916 299,517 859,234 956,674 ------- ------- ------- ------- INCOME FROM OPERATIONS 489,000 1,119,515 11,000,325 3,505,580 ------- --------- ---------- --------- OTHER INCOME (EXPENSES): Interest expense (52,105) (39,367) (139,450) (108,654) Other income 178,122 390 179,559 40,219 ------- --- ------- ------ Total Other Income (Expenses) 126,017 (38,977) 40,109 (68,435) ------- ------- ------ ------- INCOME BEFORE INCOME TAXES 615,017 1,080,538 11,040,434 3,437,145 PROVISION FOR INCOME TAXES (610) - (610) - ---- --- ---- --- NET INCOME $614,407 $1,080,538 $11,039,824 $3,437,145 ======== ========== =========== ========== COMPREHENSIVE INCOME: NET INCOME $614,407 $1,080,538 $11,039,824 $3,437,145 OTHER COMPREHENSIVE INCOME (LOSS): Foreign currency translation adjustment 790,549 (198,125) 1,870,030 (1,096,794) ------- -------- --------- ---------- COMPREHENSIVE INCOME $1,404,956 $882,413 $12,909,854 $2,340,351 ========== ======== =========== ========== NET INCOME PER COMMON SHARE: Basic $0.01 $0.02 $0.21 $0.07 ===== ===== ===== ===== Diluted $0.01 $0.02 $0.20 $0.07 ===== ===== ===== ===== WEIGHTED AVERAGE COMMON SHARES OUTSTANDING: Basic 51,875,000 51,875,000 51,875,000 51,875,000 ========== ========== ========== ========== Diluted 54,561,533 51,893,930 53,965,264 51,875,000 ========== ========== ========== ========== 

 YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) For the Nine Months Ended September 30, ------------- 2017 2016 ---- ---- CASH FLOWS FROM OPERATING ACTIVITIES: Net income $11,039,824 $3,437,145 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation 50,944 89,410 Stock-based compensation 94,177 245,518 Amortization of land use rights and yew forest assets 137,903 8,784,562 Changes in operating assets and liabilities: Accounts receivable 3,276,466 (4,873,750) Accounts receivable - related parties (11,005,869) 2,806,724 Prepaid expenses and other current assets (14,847) (7,999) Prepaid expenses - related party 17,902 18,519 Inventories, net (3,278,467) (10,567,924) VAT recoverables 1,081,219 (1,899,393) Accounts payable (1,698,340) 1,660,178 Accounts payable - related parties (603,156) 253,723 Accrued expenses and other payables (202,645) 408,002 Due to related parties (57,632) 7,471 Deferred income 220,403 - Taxes payable (11,873) (199) ------- ---- NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES (953,991) 361,987 -------- ------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment - (7,742) Purchase of land use rights and yew forest assets (793,662) - -------- --- NET CASH USED IN INVESTING ACTIVITIES (793,662) (7,742) -------- ------ CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from short-term borrowings 7,881,105 1,530,105 Repayments of short-term borrowings (4,997,764) (1,530,105) Proceeds from related party - 181 Repayments to related party (105,875) (49,030) -------- ------- NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES 2,777,466 (48,849) --------- ------- EFFECT OF EXCHANGE RATE ON CASH 30,869 (22,303) ------ ------- NET INCREASE IN CASH 1,060,682 283,093 CASH - Beginning of the period 278,991 681,608 ------- ------- CASH - End of the period $1,339,673 $964,701 ========== ======== SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: Cash paid for: Interest $140,555 $64,383 ======== ======= Income taxes $18,197 $6,460 ======= ====== NON-CASH INVESTING AND FINANCING ACTIVITIES Operating expenses paid by related party $34,341 $27,214 ======= ======= Reclassification of inventories to land use rights and yew forest assets $4,300,033 $ - ========== === === 

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SOURCE Yew Bio-Pharm Group, Inc.