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Yew Bio-Pharm Group Reports 2015 Fourth Quarter and Full Year Financial Results

Yew Bio-Pharm Group Reports 2015 Fourth Quarter and Full Year Financial Results

PR Newswire

HARBIN, China, March 30, 2016 /PRNewswire/ 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, handicraft products made from yew timber and yew candle made with yew essence oil in China, today reported financial results for the three- and twelve-months endedDecember 31, 2015.

2015 Fourth Quarter Results

Three Months Ended December 31,

Twelve Months Ended December 31,

2015

2014

2015

2014

Revenues:

TCM Raw Materials

$8,757,989

$686,669

$16,470,213

$4,043,290

Yew Trees

(5,534)

857,769

1,134,412

3,208,643

Handicrafts

46,394

48,439

156,525

173,412

Wood Ear Mushroom

1,208,546

301,231

2,648,180

301,231

Others

7,259,835

9,164,478

Total Revenues

$17,267,230

$1,894,108

$29,573,808

$7,726,576

Total revenue for the fourth quarter of 2015 increased 811.6% to $17.3 million from $1.9 million a year ago.  Sales of TCM raw materials amounted to 50.7% of total revenues, sales of handicrafts amounted to 0.3% of total revenues, sales of wood ear mushroom amounted to 7.0%, sales of others segment consisting with the yew candle and pine needle extracts amounted to 42.0% of total revenues and we did not make sales of yew trees in the fourth quarter of 2015 which was mainly attributable to the Company’s strategy adjustment to reserve more yew trees for future TCM raw materials sales. The negative revenues of yew tree sales in the fourth quarter of 2015 was mainly due to the exchange rate fluctuation of Renminbi (RMB) versus U.S. dollar compared with the first nine months of 2015.

For the 2015 fourth quarter gross profit was $1.8 million, or 10.2% of total revenue, compared with $1.0 million, or 53.0% of total revenues for the comparable 2014 quarter. Gross profit was primarily impacted by the lower gross margin yields of TCM raw materials, Wood ear mushroom and others segment.

Operating expenses increased 12.5% to $452,164 for the 2015 fourth quarter, from $402,072 in the year-ago quarter. The increasing was primarily attributable to the increases in compensation and related benefits and professional fees.

Net income in the fourth quarter of 2014 was $1.4 million, or $0.03 per diluted share, compared with a net income of $0.6 million in the year-ago quarter, or $0.01 per diluted share.

2015 Results

Total revenues for the 2015 fiscal year were $29.6 million, a 282.8% increase from $7.7 million a year earlier.  Sales of TCM raw materials amounted to 55.7% of total revenues, sales of yew trees amounted to 3.8% of total revenues, sales of handicrafts amounted to 0.5 % of total revenues, sales of wood ear mushroom amounted to 9.0% of total revenues and sales of others consisting with yew candle and pine needle extracts made up the remaining 31.0%.

Gross profit was $7.0 million, or 23.8% of total revenues, for the full year, compared with $5.6 million, or 72.3% of total revenues in 2014.

Operating expenses increased 45.2% to $1.9 million for the year ended December 31, 2015, from 1.3 million a year earlier. The increasing was primarily attributable to the increases in compensation and related benefits and other expenses.

Net income for 2015 increased to $5.3 million, or 0.10 per diluted share, from $4.3 million, or $0.07 per diluted share for 2014.

“Revenue for the year ended 2015 increased 282.8% compared to last year due to the larger-than-expected increases in sales of TCM raw materials, wood ear mushroom and the others segment that mainly consists with yew candles and pine needle extracts,” said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group, Inc. ” TCM raw materials, wood ear mushroom and others sales contributed 95.6% of the Company’s total revenues for the year of 2015. The economic growth rate of China has been slowing down in recent years, and the Chinese medium and small-sized enterprises experienced unprecedented challenges in their business operation. We started to combat this downward trend by changing our business model from agriculture focused to a more diversified business model starting the second half of 2014, such change includes the expansion into the dietary supplement market; and adding other new product segments including wood ear mushroom, yew candles and pine needle extracts.”

“We launched a new product in the dietary supplement segment in December of 2015 called Auri Essence, which is wood ear mushroom based supplement designed for the U.S. market. And we are currently working with various distributors to market this product. With significant traction generated, the Company is now officially beginning to explore the dietary supplement industry in the U.S. market. Looking ahead in 2016, we will focus on both our traditional business segments, and also the newly added products. We will continue to enrich our product mix and develop more value-added products for the Company, and we expect the Company to achieve sustained growth with the development of the new business.”

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 visitwww.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.

(financial tables follow)

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

December 31,

2015

2014

ASSETS

CURRENT ASSETS:

Cash

$

681,608

$

487,940

Restricted cash

303,511

Accounts receivable

3,857,968

922,564

Accounts receivable – related party

6,489,495

340,132

Inventories

4,665,549

1,443,078

Prepaid expenses related party

106,370

5,787

Prepaid expenses and other assets

64,174

16,791

VAT recoverables

699,258

Total Current Assets

16,867,933

3,216,292

LONG-TERM ASSETS:

Long-term inventories, net

12,334,261

10,663,545

Property and equipment, net

702,764

856,250

Land use rights and yew forest assets, net

13,906,379

20,305,821

Total Long-term Assets

26,943,404

31,825,616

Total Assets

$

43,811,337

$

35,041,908

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$

11,345

$

Accounts payable – related party

41,319

Accrued expenses and other payables

124,686

84,722

Notes payable

607,022

Taxes payable

14,261

10,547

Due to related parties

761,236

45,040

Short-term borrowings

3,081,332

Total Current Liabilities

4,641,201

140,309

Total Liabilities

4,641,201

140,309

SHAREHOLDERS’ EQUITY:

Common Stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 shares and
52,125,000 shares issued and outstanding at December 31, 2015 and 2014, respectively)

51,875

52,125

Additional paid-in capital

9,622,558

8,557,656

Retained earnings

25,067,733

20,444,667

Statutory reserves

3,762,288

3,100,766

Accumulated other comprehensive income – foreign currency translation adjustment

665,682

2,746,385

Total Shareholders’ Equity

39,170,136

34,901,599

Total Liabilities and Shareholders’ Equity

$

43,811,337

$

35,041,908

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Three-Months Ended

Twelve-Months Ended

December 31,

December 31,

2015

2014

2015

2014

REVENUES:

Revenues

$          7,356,412

$       1,127,273

$     12,794,005

$         5,657,351

Revenues – related party

9,910,818

766,835

16,779,803

2,069,225

Total Revenues

17,267,230

1,894,108

29,573,808

7,726,576

COST OF REVENUES:

Cost of revenues

7,296,392

577,115

11,104,169

1,582,980

Cost of revenues – related party

8,208,068

313,016

11,436,423

553,617

Total Cost of Revenues

15,504,460

890,131

22,540,592

2,136,597

GROSS PROFIT

1,762,770

1,003,977

7,033,216

5,589,979

OPERATING EXPENSES:

Selling

4,848

12,127

28,624

21,521

General and administrative

447,316

389,945

1,864,654

1,282,508

Total Operating Expenses

452,164

402,072

1,893,278

1,304,029

INCOME FROM OPERATIONS

1,310,606

601,905

5,139,938

4,285,950

OTHER INCOME (EXPENSES):

Interest income (expense)

(69,253)

143

(121,170)

179

Government grants

146,930

282,252

Other income (expense)

(31,967)

(3,299)

56

(1,952)

Total Other Income (Expenses)

45,710

(3,156)

161,138

(1,773)

INCOME BEFORE PROVISION FOR INCOME TAXES

1,356,316

5,301,076

4,284,177

PROVISION FOR INCOME TAXES

30,712

(16,488)

NET INCOME

$          1,387,028

$          598,749

$       5,284,588

$         4,284,177

COMPREHENSIVE INCOME:

NET INCOME

$          1,387,028

$          598,749

$       5,284,588

$         4,284,177

OTHER COMPREHENSIVE INCOME (LOSS):

Unrealized foreign currency translation adjustment

(760,704)

11,406

(2,080,703)

(200,520)

COMPREHENSIVE INCOME

626,324

610,155

3,203,885

4,083,657

NET INCOME PER COMMON SHARE:

Basic

$                   0.03

$                0.01

$                0.10

$                  0.08

Diluted

$                   0.03

$                0.01

$                0.10

$                  0.07

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

51,875,000

50,948,973

52,069,863

50,948,973

Diluted

51,875,000

62,795,716

52,113,807

62,795,716

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Years Ended
December 31,

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

5,284,588

$

4,284,177

Adjustments to reconcile net income to net cash provided by (used in) operating activities:

Depreciation

143,486

172,446

Amortization of land use rights and yew forest assets

7,599,023

510,363

Loss on disposal of fixed assets

1,814

Stock-based compensation

967,744

166,222

Issuance of common stock for professional service

65,856

335,394

Changes in operating assets and liabilities:

Accounts receivable

(3,112,659)

(506,814)

Accounts receivable – related party

(6,438,017)

35,295

Prepaid and other current assets

(49,815)

(14,112)

Prepaid expenses – related party

(105,316)

28,049

Inventories

(5,737,554)

(842,558)

VAT recoverables

(729,984)

Accounts payable

11,844

Accounts payable – related party

43,135

Accrued expenses and other payables

46,807

(51,393)

Due to related parties

478

(3,894)

Notes payable

633,695

Taxes payable

4,320

377

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

(1,372,369)

4,115,366

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from disposal of property and equipment

3,594

5,000

Change in restricted cash

(316,848)

Loan made to related party

(35,384)

Repayment from related party

35,384

Purchase of property and equipment

(31,497)

(8,534)

Purchase of land use rights and yew forest assets

(2,018,014)

(2,444,139)

NET CASH USED IN INVESTING ACTIVITIES

(2,362,765)

(2,447,673)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term borrowings

3,216,727

Advances and loans from related parties

718,120

1,220

Contribution from owners – transfer of property and equipment to entity under common
control with proceeds over carrying amount

31,052

Distribution to owners – excess of acquisition price over carrying value of yew forest
assets purchased from entities under common control

(2,332,048)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

3,965,899

(2,330,828)

EFFECT OF EXCHANGE RATE ON CASH AND CASH EQUIVALENTS

(37,097)

(8,536)

NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS

193,668

(671,671)

CASH AND CASH EQUIVALENTS – Beginning of period

487,940

1,159,611

CASH AND CASH EQUIVALENTS – End of period

$

681,608

$

487,940

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Interest

$

75,196

$

Income taxes

$

$

 

 

 

Company Contacts:

Henry Pang

Yew Bio-Pharm Group, Inc.

Tel: (626) 401-9588

hpang@yewbiopharm.com

Investor Relations Contacts:

Cami Xue

Chineseinvestors.com, Inc.

Tel: (800) 958-8561

Cami@chinesefn.com

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SOURCE Yew Bio-Pharm Group, Inc.

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