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Yew Bio-Pharm Group Reports 2013 Fourth Quarter and Full Year Financial Results

HARBIN, CHINA, March 31, 2014 — Yew Bio-Pharm Group, Inc. (“Yew Bio” or the “Company”) (OTCBB: YEWB), a major grower and seller of yew trees, yew raw materials used in the manufacture of traditional Chinese medicine and products made from yew timber in China, today reported financial results for the three- and twelve-months ended December 31, 2013.   2013 Fourth Quarter Results

Three Months Ended December 31,

Twelve Months Ended December 31,

2013

2012

2013

2012

Revenues:
TCM Raw Materials

$998,934

$884,796

$4,170,748

$3,745,348

Yew Trees

909,311

966,464

3,011,728

2,819,968

Handicrafts

81,770

43,474

257,172

162,208

Total Revenues

$1,990,015

$1,894,734

$7,439,648

$6,727,524

Total revenue for the fourth quarter of 2013 increased 5.0% to $2.0 million from $1.9 million a year ago.  Sales of TCM raw materials amounted to 50.2% of total revenues, sales of yew trees amounted to 45.7% of total revenues, and sales of handicrafts made up the remaining 4.1%.

For the 2013 fourth quarter gross profit was $1.3 million, or 65.6 % of total revenue, compared with $1.5 million, or 76.7% of total revenues for the comparable 2012 quarter. Gross profit was primarily impacted by the remanufacturing of yew trees into TCM from whole plants at the Qingshan plant.

Operating expenses were $262,982 in the quarter, as compared to $2.6 million in the year-ago quarter, which included stock-based compensation of $2.5 million.

 

Net income in the fourth quarter of 2013 was $1.0 million, or $0.02 per diluted share, compared with a net loss of $1.2 million in the year-ago quarter, or $0.02 per share.

  2013 Results

Total revenues for the 2013 fiscal year were $7.4 million, a 10.6% increase from $6.7 million a year earlier.  Sales of TCM raw materials amounted to 56.1% of total revenues, sales of yew trees amounted to 40.5% of total revenues, and sales of handicrafts made up the remaining 3.4%.

 Gross profit was $5.0 million, or 67.6% of total revenues, for the full year, compared with $5.4 million, or 81.0% of total revenues in 2012.

 Operating expenses were $1.1 million for the year ended December 31, 2013, compared with $3.2 million a year earlier.

 Net income for 2013 increased to $3.9 million, or 0.08 per diluted share, from $2.2 million, or $0.05 per diluted share for 2012.

 “During fiscal 2013, we were able to achieve growth across all revenue categories, selling more than 24,000 kg of TCM raw materials and nearly 500,000 yew trees,” said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group. “To increase our growth trajectory, we are expanding our sales and marketing efforts to new customers, as well as continuing to evaluate land leasing opportunities.

 “Through our patented Asexual Reproduction Method, we are able to significantly shorten the maturity cycle of naturally-grown yew trees, in as little as three years compared to more than 50 years for naturally grown yew trees. This allows for earlier commercialization while not further endangering the China’s natural supply of yew trees, which were over-forested since the discovery of taxol,” Mr. Wang added.

 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.  To learn more, please visit www.yewchina.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.

(financial tables follow)

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

 December 31,
 2013  2012
ASSETS
CURRENT ASSETS:
    Cash $          1,159,611  $          386,821
    Accounts receivable             418,875          722,598
    Accounts receivable – related party             377,821          284,986
    Inventories          1,089,087          991,234
    Prepaid expenses and other assets                2,697                150
    Prepaid expenses – related party               34,031            60,245
        Total Current Assets          3,082,122        2,446,034
LONG-TERM ASSETS:
    Inventories, net of current portion         10,245,146        9,382,164
    Property and equipment, net          1,033,078          885,969
    Land use rights and yew forest assets, net         20,953,562      15,328,318
        Total Long-term Assets         32,231,786      25,596,451
        Total Assets $         35,313,908  $      28,042,485
LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
    Accounts payable $                       –  $                990
    Accrued expenses and other payables             136,713          199,098
    Taxes payable               10,232              5,722
    Due to related parties          4,850,637            47,876
        Total Current Liabilities          4,997,582          253,686
        Total Liabilities          4,997,582          253,686
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS’ EQUITY:
    Common Stock ($0.001 par value;  50,000,000 shares authorized;  50,000,000  and
     50,000,000 issued and outstanding at December 31, 2013 and 2012, respectively)               50,000            50,000
    Additional paid-in capital          8,058,165      10,396,377
    Retained earnings         16,664,138      13,182,032
    Statutory reserves          2,597,118        2,179,494
    Accumulated other comprehensive income – foreign currency translation adjustment          2,946,905        1,980,896
        Total Shareholders’ Equity         30,316,326      27,788,799
        Total Liabilities and Shareholders’ Equity $         35,313,908  $      28,042,485


YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

 

Three-Months Ended Twelve-Months Ended
December 31, December 31,
2013 2012 2013 2012
REVENUES:
    Revenues $       1,848,698 $       1,482,606 $      5,889,190  $       5,713,237
    Revenues – related party          141,317          412,128      1,550,458       1,014,287
        Total Revenues       1,990,015       1,894,734      7,439,648       6,727,524
COST OF REVENUES:
    Cost of revenues          648,654          368,201      1,968,682       1,095,158
    Cost of revenues – related party            36,327            74,147         438,718          183,899
        Total Cost of Revenues          684,981          442,348      2,407,400       1,279,057
GROSS PROFIT       1,305,034       1,452,386      5,032,248       5,448,467
OPERATING EXPENSES:
     Selling              4,745              6,723           23,794            24,603
     Compensation  –       2,527,800  –       2,527,800
     Other general and administrative          258,237            71,776      1,110,717          691,562
        Total Operating Expenses          262,982       2,606,299      1,134,511       3,243,965
INCOME FROM OPERATIONS       1,042,052     (1,153,913)      3,897,737       2,204,502
OTHER INCOME (EXPENSES):
     Interest income                 402                 132                647              2,194
     Other income (expenses)                   44                 178             1,346               (429)
        Total Other Income (Expenses)                 446                 310             1,993              1,765
NET INCOME $       1,042,498 $     (1,153,603) $      3,899,730  $       2,206,267
COMPREHENSIVE INCOME:
      NET INCOME $       1,042,498 $     (1,153,603) $      3,899,730 $       2,206,267
      OTHER COMPREHENSIVE INCOME:
           Unrealized foreign currency translation gain          188,142            72,720         966,009          181,028
      COMPREHENSIVE INCOME $       1,230,640 $     (1,080,883) $      4,865,739  $       2,387,295
NET INCOME PER COMMON SHARE:
       Basic $                0.02 $              (0.02) $               0.08  $                0.05
       Diluted $                0.02 $              (0.02) $               0.08  $                0.05
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
       Basic         50,000,000           47,819,672         50,000,000           47,819,672
       Diluted         50,000,000           47,819,672         50,000,000           47,819,672


YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

 

For the year ended
December 31
2013 2012
CASH FLOWS FROM OPERATING ACTIVITIES:
Net  income $            3,899,730 $         2,206,267
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation               179,857            217,090
Amortization of land use rights and yew forest assets               381,659            346,741
Loss on disposal of fixed assets                      349                1,013
Stock-based compensation  –         2,246,907
Changes in operating assets and liabilities:
Accounts receivable               323,160           (722,170)
Accounts receivable – related party               (82,282)           (284,817)
Prepaid and other current assets                 (2,515)                   284
Prepaid expenses – related party                 27,823             (60,209)
Inventories             (222,738)        (2,090,046)
Accounts payable                 (1,008)        (1,369,280)
Accrued expenses and other payables               (65,466)              78,597
Due to related parties  –           (157,025)
Taxes payable                   4,255                5,211
NET CASH PROVIDED BY OPERATING ACTIVITIES            4,442,824            418,563
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment             (299,613)           (313,908)
Purchase of land use rights and yew forest assets          (3,393,082)           (392,136)
NET CASH USED IN INVESTING ACTIVITIES          (3,692,695)           (706,044)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayments for related parties advances                    (210)             (63,293)
NET CASH USED IN FINANCING ACTIVITIES                    (210)             (63,293)
EFFECT OF EXCHANGE RATE ON CASH                 22,871                5,224
NET DECREASE IN CASH               772,791           (345,550)
CASH  – Beginning of year               386,821            732,371
CASH – End of year $            1,159,611 $            386,821