Tiens Biotech Group (USA) Reports First Quarter Results

Tuesday, May 17, 2011 General News
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TIANJIN, China, May 16, 2011 Tiens Biotech Group (USA), Inc. (the "Company" or "Tiens", NYSE AMEX: TBV), www.tiens-bio.com, a company dedicated to the research, development, manufacturing, and marketing of nutrition supplement products, including wellness products and dietary supplements, today announced financial results for the quarter ended March 31, 2011.

Revenue for the first quarter of 2011 was $13.1 million, compared to $11.4 million for 2010.

Net income for first quarter of 2011 was $2.9 million, or $0.04 per share, compared to $3.6 million, or $0.05 per share for 2010.

The 14.4% increase in revenue for the first quarter of 2011 mainly resulted from a 21.2% increase in domestic sales as compared to the year-ago period. There were two primary reasons for the robustness of the domestic market. First, distributors rushed to increase inventory in advance of the planned price increases for some products that were scheduled for March 2011. Additionally, Tiens began to see the effects of the long-awaited direct selling license that was awarded by the Ministry of Commerce of the People's Republic of China on March 11, 2011. On the international front, Tiens experienced a modest 4.6% increase as a result of increased sales to South Africa.

Net income, however, was negatively impacted by an increase of $1.4 million in selling, general and administrative expenses. This increase was primarily responsible for the 18.3% decrease in net income for the quarter and was mainly due to increases in depreciation related to the transfer of construction in progress to fixed assets.

Other Highlights

Cost of sales were $4.1 million in 2011 compared to $3.4 million in 2010, an increase of 20.2%. This increase was primarily due to the corresponding increase in sales. However, cost of sales rose at a higher rate than sales overall, as a result of a reduction in sales of the Company's higher margin products.

Gross profit increased by 11.9% to $8.9 million in 2011, compared to $8.0 million in 2010. The gross profit margin for 2011 was 68.3% compared to 69.8% for the same period in 2010.

Selling, general and administrative expenses increased by 39.3% to $4.9 million in 2011, compared to $3.5 million in 2010. The increase was primarily due to the aforementioned increases in depreciation.

As of March 31, 2011, Tiens had $130.7 million of retained earnings and total shareholders' equity of $190.1 million.

Jinyuan Li, Chairman, President and CEO of Tiens, said, "We are pleased by the increase in sales this quarter and expect our new domestic selling license to be a growing contributor to revenue in the months and years ahead. In the international arena, we are confident that our operations will gradually improve as worldwide economic conditions continue to recover. Likewise, operational improvements made at the distributor level should also boost results over time. Our commitment to both domestic and international growth remains steadfast as we continue to manage our business through the economic recovery and look ahead toward further execution of our strategic growth plans in both China and abroad."

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.

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; and (v) 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.

-Tables Follow-

CONTACT: Investor Relations Debra Berliner Tiens Biotech Group (USA), Inc. G. S. Schwartz & Co. Tel: +86-22-8213-3118 Tel: 212-725-4500 Fax: +86-22-8213-7914 Fax: 212-725-9188 Email: investor@tiens-bio.com Email: dberliner@schwartz.com http://www.tiens-bio.com

SOURCE Tiens Biotech Group (USA), Inc.

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