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Yew Bio-Pharm Group Reports 2017 First Quarter Financial Results

EL MONTE, Calif.May 15, 2017 /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, handicraft products made from yew timber and yew candle and soap made with yew essence oil in China, today reported financial results for the three months ended March 31, 2017.

2017 First Quarter Results

Three Months Ended March 31,

Percentage

2017

2016

Change

Revenues:

  TCM Raw Materials

$2,534,261

$8,043,465

(68)%

  Yew Trees

1,505

(100)%

  Handicrafts

1,361

17,250

(92)%

  Others

5,339,842

558,149

857%

  Total Revenues

$7,875,464

$8,620,369

(8.64)%

Total revenues for the first quarter of 2017 decreased 8.6% to $7.9 million from $8.6 million a year ago. Sales of TCM raw materials amounted to 32.2% of total revenues; sales of yew trees amounted to 0% of total revenues; sales of handicrafts amounted to 0 % of total revenues and sales of “Others” segment consisting with yew candle, yew essence oil soap and pine needle extracts amounted to 67.8% of total revenues. The Company did not make sales of yew tree in the first quarter of 2017 which was mainly attributable to its strategy adjustment to reserve more yew trees for future TCM raw materials sales. For the 2017 first quarter, gross profit was $519,980, or 6.6% of total revenues, compared with $1.4 million, or 16.2% of total revenues for the comparable 2016 quarter. The decrease in the gross profit margin were primarily attributable to the lower gross margin of “Others” segments. Operating expenses decreased 5.5% to $298,403 for the quarter ended March 31, 2017, from $315,900 in the year-ago quarter. The decreasing was primarily attributable to the decreases in stock-based compensation. Net income for the three months ended March 31, 2017 decreased 83.8% to $169,904 from $1.1 million in the same quarter last year due to the decreases in revenues from TCM raw materials. Earnings per diluted share for the three months ended March 31, 2017 was $0.00 as compared to $0.02 for the same period last year. “We are pleased with the steady sales increase in Others segment,” said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group. “This newly added segment had contributed a great portion of our total revenues since the second quarter of 2016. As we mentioned in prior announcement, we expected to launch some new products in the year of 2017, and we recently signed agreement to manufacture two cosmetic series products, the facial creamer and wrinkle remover, both contain yew oil as the main ingredient. We believe these new developed cosmetic products will greatly enrich our product mix and to increase our potential revenues.” “We also recently established a retail store located at 1635 S. San Gabriel Blvd. #11, San Gabriel, California. The retail store is mainly focus on promoting and selling yew candles, yew oil soaps and some other yew merchandises. This is a very important milestone for the Company to explore the U.S. consumer market, as well as to promote our yew related products. Accompanied by progressive strategy towards market contact, we believe our yew series products will attract large numbers of U.S. customers in the future.” 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 visit www.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

March 31,

2017

December 31,

2016

(Unaudited)

                                                        ASSETS

CURRENT ASSETS:

Cash

$

520,787

$

278,991

Accounts receivable

16,348,972

14,467,852

Accounts receivable – related party

8,075,685

6,941,931

Inventories, net

10,730,482

10,296,792

Prepaid expenses – related party

70,728

76,035

Prepaid expenses and other assets

59,897

75,743

VAT recoverables

1,251,678

1,655,954

Total Current Assets

37,058,229

33,793,298

LONG-TERM ASSETS:

Long-term inventories, net

5,305,705

7,151,613

Property and equipment, net

673,498

692,116

Land use rights and yew forest assets, net

4,562,660

4,558,234

Total Long-term Assets

10,541,863

12,401,963

Total Assets

$

47,600,092

$

46,195,261

                          LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$

944,478

$

2,700,148

Accounts payable – related parties

511,920

638,318

Accrued expenses and other payables

264,353

379,294

Notes payable

1,165,373

1,156,444

Taxes payable

4,855

16,520

Due to related parties

886,640

883,596

Short-term borrowings

4,600,922

1,723,865

Total Current Liabilities

8,378,541

7,498,185

NONCURRENT LIABILITIES:

Deferred income

121,907

120,973

Total Noncurrent Liabilities

121,907

120,973

Total Liabilities

8,500,448

7,619,158

SHAREHOLDERS’ EQUITY:

Common Stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 shares issued and outstanding at March 31, 2017 and December 31, 2016, respectively) 

51,875

51,875

Additional paid-in capital

9,703,781

9,654,024

Retained earnings

27,244,528

27,074,624

Statutory reserves

3,762,288

3,762,288

Accumulated other comprehensive loss – foreign currency translation adjustment

(1,662,828)

(1,966,708)

Total Shareholders’ Equity

39,099,644

38,576,103

Total Liabilities and Shareholders’ Equity

$

47,600,092

$

46,195,261

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

(UNAUDITED)

For the Three Months Ended March 31,

2017

2016

REVENUES:

Revenues

$

5,341,203

$

576,904

Revenues – related party

2,534,261

8,043,465

Total Revenues

7,875,464

8,620,369

COST OF REVENUES:

Cost of revenues

5,301,216

627,983

Cost of revenues – related party

2,054,268

6,598,904

Total Cost of Revenues

7,355,484

7,226,887

GROSS PROFIT

519,980

1,393,482

OPERATING EXPENSES:

Selling expense

265

3,252

General and administrative expense

298,138

312,648

Total Operating Expenses

298,403

315,900

INCOME FROM OPERATIONS

221,577

1,077,582

OTHER INCOME (EXPENSES):

Interest expense

(51,963)

(27,320)

Other income

290

Total Other Expenses

(51,673)

(27,320)

INCOME BEFORE PROVISION FOR INCOME TAXES

169,904

1,050,262

PROVISION FOR INCOME TAXES

NET INCOME

$

169,904

$

1,050,262

COMPREHENSIVE INCOME:

NET INCOME

$

169,904

$

1,050,262

OTHER COMPREHENSIVE INCOME :

Foreign currency translation adjustment

303,880

275,422

COMPREHENSIVE INCOME

$

473,784

$

1,325,684

NET INCOME PER COMMON SHARE:

Basic

$

0.00

$

0.02

Diluted

$

0.00

$

0.02

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

51,875,000

51,875,000

Diluted

56,670,931

51,875,000

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Three Months Ended March 31,

2017

2016

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

169,904

$

1,050,262

Adjustments to reconcile net income to net cash used in operating activities:

Depreciation

23,220

30,504

Amortization of land use rights and yew forest assets

30,778

4,996,027

Stock-based compensation

49,757

82,598

Changes in operating assets and liabilities:

Accounts receivable

(1,770,317)

1,980,590

Accounts receivable – related party

(1,080,518)

(3,313,946)

Prepaid expenses and other current assets

16,129

(788,609)

Prepaid expenses – related party

5,896

(299,778)

Inventories

1,542,136

(4,091,713)

VAT recoverables

417,200

(96,129)

Accounts payable

(1,776,755)

46,080

Accounts payable – related parties

(131,370)

Accrued expenses and other payables

(107,982)

(16,440)

Due to related parties

11,880

81

Taxes payable

(11,760)

5,927

NET CASH USED IN OPERATING ACTIVITIES

(2,611,802)

(414,546)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(4,261)

NET CASH USED IN INVESTING ACTIVITIES

(4,261)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term borrowings

2,880,000

Repayments to related parties

(20,000)

(35,000)

Proceeds from related parties

10,222

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

2,860,000

(24,778)

EFFECT OF EXCHANGE RATE ON CASH

(6,402)

(1,646)

NET INCREASE (DECREASE) IN CASH

241,796

(445,231)

CASH – Beginning of period

278,991

681,608

CASH – End of period

$

520,787

$

236,377

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Interest

$

25,368

$

26,884

Income taxes

$

$

NON-CASH INVESTING AND FINANCING ACTIVITIES

Operating expense paid by related party

$

9,927

$

Company Contacts: Henry Pang Yew Bio-Pharm Group, Inc. Tel: (626) 401-9588 hpang@yewbiopharm.com