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Revenue for the first quarter of 2008 was $12.8 million compared to $16.2million for the first quarter of 2007.
Net income for the first quarter of 2008 was $3.6 million, or $0.05 pershare, compared to net income of $6.5 million, or $0.09 per share for thefirst quarter of 2007.
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Revenue by Region
For the first quarter of 2008, revenue in China was $6.1 million comparedto $7.2 million for the first quarter of 2007. Sales in China reflect thecontinued uncertainty regarding the effect of direct selling regulations andthe timing of the direct selling license application process and approval.The application of Tianshi Engineering for a direct selling license in Chinais still pending and until the application is approved, Tianshi Engineeringwill continue to sell Tiens' products through its branches, affiliatedcompanies and chain stores in China.
For the first quarter of 2008, international revenue was $6.7 million,compared to $9.0 million for the first quarter of 2007.
The change in international sales reflects China's General Administrationof Quality Supervision, Inspection and Quarantine's (AQSIQ) ongoing nationalcampaign in China against unsafe food and substandard products. As a resultof this campaign by the AQSIQ, there has been a general slow-down and backlogof export clearances for Chinese food products. As a result of these delays,Tiens' international affiliates were not able to purchase sufficientquantities of its products to meet their demand. However, it is important tonote that to date, no problems have been identified with any of Tiens'products. The campaign, which began in August 2007, was originally scheduledto finish at the end of 2007, is currently scheduled to continue throughout2008.
Other Highlights
Cost of sales for the first quarter of 2008 was $4.0 million compared to$4.4 million for the same period in 2007. This decrease was primarily due tothe decrease in sales revenue. The decrease in cost of sales was not in linewith the decrease in revenue due to increases in the cost of our raw materials,and a strong remenbi compared to the dollar.
Gross profit for the first quarter of 2008 was $8.8 million compared to$11.8 million for the first quarter of 2007. The gross profit margin for thefirst quarter of 2008 was 68.5%, compared to 72.7% for the first quarter of2007. The decreases reflect the aforementioned cost of raw materials whichincreased while the price at which products were sold remained constant.
Selling, general and administrative expenses were $3.2 million for thefirst quarter of 2008 and 2007. The selling and administrative expenses as apercentage of sales was 25.3% for the first quarter of 2008 compared to 20.1%for the same period in 2007. This increase reflects the fixed costsassociated with selling, general and administrative expenses and the declinein revenue.
As of March 31, 2008, Tiens had $82.3 million of retained earnings andtotal shareholders' equity of $121.0 million.
Jinyuan Li, Chairman, President and CEO of Tiens, said, ''We continue toface the challenges of the current direct selling environment in China anddelays in exporting our products internationally. Our high quality productshave remained beyond reproach by the national campaign in China to prevent theexport of unsafe products. We see future opportunities including thedevelopment of new products and enhancing our current manufacturingcapabilities as part of our strategic initiatives to best position Tiens forlong term domesic and international growth.''
About Tiens Biotech Group (USA), Inc. ( http://www.tiens-bio.com )
Tiens Biotech Group (USA), Inc. (AMEX:
