Tiens Biotech Group (USA), Inc. (the "Company" or "Tiens", NYSE AMEX: TBV), a company dedicated to the research, development, manufacturing, and marketing of nutrition supplement products, including wellness products and dietary supplements, announced financial results for the year ended December 31, 2010.
For 2010, revenue was $41.3 million, compared to $62.0 million for 2009.
Net income for 2010 was $4.8 million, or $0.07 per share, compared to $23.8 million, or $0.33 per share for 2009.
Results for 2010 mainly reflect a decrease in international sales. For 2010, international revenue was $16.4 million, compared to $34.7 million for 2009. In 2008, China's Administration of Quality Supervision, Inspection and Quarantine carried out a national campaign against unsafe food and substandard products, which brought on a general slow-down and backlog of export clearances for Chinese food products. Upon the lifting of the regulations, overseas affiliated companies began to purchase more products, thereby increasing sales for 2009.
In addition, Tiens' Indonesia affiliated company has not purchased from the Company during the year of 2010, given they purchased more products in 2009 after the 2008 product scarcity for the reason noted above. In addition, local Original Equipment Manufacturers in Indonesia have been producing healthcare products with the Company's semi-finished goods, which have a profit margin that is much lower than the profit margin of finished goods.
Tiens' affiliated companies in many regions have made certain adjustments to their marketing programs and reorganizations at their branch and higher levels, which are expected to boost sales performance over the long run, but negatively affect short-term sales.
Cost of sales were $15.0 million in 2010 compared to $20.2 million in 2009, a decrease of 25.6%. This decrease was primarily due to the corresponding decrease in sales. Cost of sales decreased at a lower rate than revenue, primarily due to fixed costs, which do not increase or decrease in line with sales.
Gross profit decreased by 37.0% to $26.3 million in 2010, compared to $41.8 million in 2009. The gross profit margin for 2010 was 63.7% compared to 67.5% in 2009.
Selling, general and administrative expenses increased by 22.0% to $19.5 million in 2010, compared to $16.0 million in 2009. The increase was primarily due to increases in allowance for bad debt ($1.9 million), salaries expenses ($0.7 million) and research & development expenses ($0.6 million).
As of December 31, 2010, Tiens had $128.0 million of retained earnings and total shareholders' equity of $285.5 million.
In addition, Tiens reported that on March 11, 2011, Tianjin Tianshi Biological Engineering Co., Ltd. (Tianshi Engineering) was awarded a direct selling license in Tianjin.
Jinyuan Li, Chairman, President and CEO of Tiens, said, "We remain confident that domestic sales will return to, and potentially exceed, previous levels, as distributors begin to replenish their stock of our products. In addition, we maintain this same positive sentiment regarding international sales, which we expect will benefit from the removal of export restrictions and gradual economic improvement. We are steadfast in our commitment to building greater market share in China, expanding our international customer base, and further implementing our strategic plans for long-term domestic and international growth."
About Tiens Biotech Group (USA), Inc. 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 45 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 87 branches. Outside of China, Tiens sells its products to affiliated companies in 45 countries who 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.