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Yew Bio-Pharm Group Reports 2015 Third Quarter Financial Results

Yew Bio-Pharm Group Reports 2015 Third Quarter Financial Results

PR Newswire

HARBIN, China, Nov. 16, 2015 /PRNewswire/ — Yew Bio-Pharm Group, Inc. (“Yew Bio” or the “Company”) (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 nine-months ended September 30, 2015.

2015 Third Quarter Results

Three Months Ended September 30,

Percentage

2015

2014

Change

Revenues:

TCM Raw Materials

$2,845,904

$1,161,838

145%

Yew Trees

96,275

514,130

(81)%

Wood ear mushroom

134,962

100%

Handicrafts

15,417

24,956

(38)%

Others

1,904,643

100%

Total Revenues

$4,997,201

$1,700,924

194%

Total revenues for the third quarter of 2015 increased 194% to $5.0 million from $1.7 million a year ago. Sales of TCM raw materials amounted to 56.9% of total revenues; sales of yew trees amounted to 1.9% of total revenues; sales of wood ear mushroom amounted to 2.7% of total revenues; sales of handicrafts amounted to 0.3% of total revenues; and sales of others, consisting with yew candles, amounted to 38.2% of total revenues.

For the 2015 third quarter, gross profit was $1.4 million, or 28.4% of total revenues, compared with $1.4 million, or 82.7% of total revenues for the comparable 2014 quarter. The decrease in the gross profit margin was primarily attributable to the lower gross margin yield of TCM raw materials and handicrafts.

Operating expenses decreased 5.6% to $484,573 for the quarter ended September 30, 2015, from $513,539 in the year-ago quarter. The decreasing was primarily attributable to the decreases in compensation and related benefits and professional fees.

Net income for the three months ended September 30, 2015 increased 4.6% to $933,514 from $892,716 in the same quarter last year. Earnings per diluted share for the three months ended September 30, 2015 was $0.02, in line with the same period last year.

Nine Months 2015 Financial Results

Nine Months Ended September 30,

Percentage

2015

2014

Change

Revenues:

TCM Raw Materials

$7,712,224

$3,356,622

130%

Yew Trees

1,139,946

2,350,874

(52)%

Wood ear mushroom

1,439,634

100%

Handicrafts

110,131

124,972

(12)%

Others

1,904,643

100%

Total Revenues

$12,306,578

$5,832,468

111%

Total revenues for the nine months of 2015 increased to$12.3 million from $5.8 million a year ago. Sales of TCM raw materials amounted to 62.7% of total revenues; sales of yew trees amounted to 9.3% of total revenues; sales of wood ear mushroom amounted to 11.7% of total revenues; sales of handicrafts amounted to 0.9% of total revenues; and sales of others, consisting with yew candles, amounted to 15.4% of total revenues.

Gross profit was $5.3 million, or 42.8% of total revenues, compared with $4.6 million, or 78.6% of total revenues for the comparable 2014 quarter. The decrease in the gross profit margin was primarily attributable to the lower gross margin yield of TCM raw materials.

Operating expenses increased 59.8% to $1.4 million for the nine months ended September 30, 2015, from $901,957 for the same period last year. The increasing was primarily attributable to the increases in compensation and related benefits and other expenses.

Net income for the nine months of 2015 increased 5.8% to $3.9 million from $3.7 million for the same period last year. Earnings per diluted share were $0.07, compared to $0.06 for the same period last year.

At September 30, 2015 the company had approximately $171,483 in cash and $1.7 million in accounts receivable.

“Revenue for the quarter increased 194% compared to last year due to the sales increases in TCM raw materials, wood ear mushroom and the others segments which offset the decrease of Yew tree sales,” said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group, Inc. “TCM raw materials and wood ear mushroom sales contributed a large proportion for the Company’s revenues as our related party, Yew Pharmaceutical, increases the demands in the past nine months,”

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.

 

 

Investor Relations Contacts:

Cami Xue

Chineseinvestors.com, Inc.

Tel: (800) 958-8561

Cami@chinesefn.com  

 

 

(financial tables follow)

 

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

September 30,
2015

December
31, 2014

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash

$

171,483

$

487,940

Accounts receivable

1,654,609

922,564

Accounts receivable – related party

340,132

Inventories

7,791,129

1,443,078

Due from related parties

47,601

Prepaid expenses – related party

369,232

5,787

Prepaid expenses and other assets

277,699

16,791

VAT recoverables

1,072,052

Total Current Assets

11,383,805

3,216,292

LONG-TERM ASSETS:

Long-term inventories, net

11,392,307

10,663,545

Property and equipment, net

725,122

856,250

Land use rights and yew forest assets, net

19,726,404

20,305,821

Total Long-term Assets

31,843,833

31,825,616

Total Assets

$

43,227,638

$

35,041,908

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$

739,691

$

Accounts payable – related party

1,480,698

Accrued expenses and other payables

175,227

84,722

Advances from customers

160,072

Taxes payable

48,600

10,547

Due to related parties

697,521

45,040

Short-term borrowings

1,642,360

Total Current Liabilities

4,944,169

140,309

Total Liabilities

4,944,169

140,309

SHAREHOLDERS’ EQUITY:

Common stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 and
52,125,000 shares issued and outstanding at September 30, 2015 and December 31,
2014, respectively)

51,875

52,125

Additional paid-in capital

9,362,216

8,557,656

Retained earnings

23,848,364

20,444,667

Statutory reserves

3,594,628

3,100,766

Accumulated other comprehensive income – foreign currency translation adjustment

1,426,386

2,746,385

Total Shareholders’ Equity

38,283,469

34,901,599

Total Liabilities and Shareholders’ Equity

$

43,227,638

$

35,041,908

 

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)

For the Three Months
Ended September 30,

For the Nine Months
Ended
September 30,

2015

2014

2015

2014

REVENUES:

    Revenues

$

1,997,998

$

1,135,825

$

5,437,593

$

4,530,078

    Revenues – related party

2,999,203

565,099

6,868,985

1,302,390

       Total Revenues

4,997,201

1,700,924

12,306,578

5,832,468

COST OF REVENUES:

    Cost of revenues

1,900,418

236,793

3,807,777

1,005,865

    Cost of revenues – related party

1,677,625

57,004

3,228,355

240,601

       Total Cost of Revenues

3,578,043

293,797

7,036,132

1,246,466

GROSS PROFIT

1,419,158

1,407,127

5,270,446

4,586,002

OPERATING EXPENSES:

    Selling

10,013

6,973

23,776

9,394

    General and administrative

474,560

506,566

1,417,338

892,563

       Total Operating Expenses

484,573

513,539

1,441,114

901,957

INCOME FROM OPERATIONS

934,585

893,588

3,829,332

3,684,045

OTHER INCOME (EXPENSES):

    Interest income (expense)

(33,496)

(255)

(51,917)

36

    Government grant

135,322

    Other income (expense)

36,496

(617)

32,023

1,347

       Total Other Income (Expenses)

3,000

(872)

115,428

1,383

INCOME BEFORE INCOME TAXES

937,585

892,716

3,944,760

3,685,428

PROVISION FOR INCOME TAXES

(4,071)

(47,200)

NET INCOME

$

933,514

$

892,716

$

3,897,560

$

3,685,428

COMPREHENSIVE INCOME (LOSS):

    NET INCOME

$

933,514

$

892,716

$

3,897,560

$

3,685,428

    OTHER COMPREHENSIVE INCOME (LOSS):

       Foreign currency translation adjustment

(1,701,546)

10,560

(1,319,999)

(211,926)

    COMPREHENSIVE INCOME (LOSS)

$

(768,032)

$

903,276

$

2,577,561

$

3,473,502

NET INCOME PER COMMON SHARE:

    Basic

$

0.02

$

0.02

$

0.07

$

0.07

    Diluted

$

0.02

$

0.02

$

0.07

$

0.06

WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING:

    Basic

52,158,967

51,639,946

52,136,447

50,552,656

    Diluted

52,189,711

51,759,743

55,518,924

63,026,963

 

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Nine Months Ended
September 30,

2015

2014

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

3,897,560

$

3,685,428

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

Depreciation

112,837

132,355

Stock-based compensation

800,954

5,657

Stock issued for professional services

3,356

321,387

Amortization of land use rights and yew forest assets

1,108,773

384,467

Gain on disposal of property and equipment

(32,083)

(1,509)

Changes in operating assets and liabilities:

Accounts receivable

(783,741)

(1,189,571)

Accounts receivable – related party

339,740

375,596

Prepaid expenses and other current assets

(269,309)

(34,532)

Prepaid expenses – related party

(375,030)

21,030

Due from related parties

(13,383)

VAT recoverables

(1,105,672)

Inventories

(5,191,187)

(205,265)

Accounts payable

15,974

Accrued expenses and other payables

95,379

(9,992)

Advances from customers

165,092

Taxes payable

39,506

(5,857)

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

(1,207,208)

3,495,168

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from disposal of property and equipment

5,000

Purchase of property and equipment

(7,913)

(3,390)

Payment for land use rights and yew forest assets

(1,362,205)

(4,503,084)

NET CASH USED IN INVESTING ACTIVITIES

(1,370,118)

(4,501,474)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term borrowings

1,642,360

Proceeds from related party advances

658,255

610

Repayments for related party advances

(5,656)

(25,674)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

2,294,959

(25,064)

EFFECT OF EXCHANGE RATE ON CASH

(34,090)

(8,123)

NET DECREASE IN CASH

(316,457)

(1,039,493)

CASH – Beginning of period

487,940

1,159,611

CASH – End of period

$

171,483

$

120,118

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Interest

$

47,017

$

Income taxes

$

$

Non-cash investing and financing activities

Reclassification of yew forest assets to inventories

$

190,817

$

828,908

 

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SOURCE Yew Bio-Pharm Group, Inc.

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