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

PR Newswire

HARBIN, China, March 30, 2016

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	$	–	$	–