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Yew Bio-Pharm Group Reports 2016 Third Quarter Financial Results

Yew Bio-Pharm Group Reports 2016 Third Quarter Financial Results

PR Newswire

EL MONTE, Calif., Nov. 14, 2016 /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 made with yew essence oil in China, today reported financial results for the three- and nine-months ended September 30, 2016.

2016 Third Quarter Results

Three Months Ended
September 30,

Increase

Percentage

2016

2015

(Decrease)

Change

TCM raw materials

$

6,873,988

$

2,845,904

$

4,028,084

142

%

Yew trees

96,275

(96,275)

(100)%

Wood ear mushroom

134,962

(134,962)

(100)%

Handicrafts

1,087

15,417

(14,330)

93

%

Others

7,792,024

1,904,643

5,887,381

309

%

Total

$

14,667,099

$

4,997,201

$

9,669,898

194

%

Total revenues for the third quarter of 2016 increased 194% to $15 million from $5.0 million a year ago. Sales of TCM raw materials amounted to 46.9% of total revenues; sales of yew trees amounted to 0% of total revenues; sales of wood ear mushroom amounted to 0% of total revenues; sales of handicrafts amounted to 0.01% of total revenues; and sales of others, consisting with yew candles, pine needle extract and dietary supplement, amounted to 53.1% of total revenues.

For the 2016 third quarter, gross profit was $1.4 million, or 9.7% of total revenues, compared with $1.4 million, or 28.4% of total revenues for the comparable 2015 quarter. The decrease in gross profit margin was primarily attributable to the lower gross margin yields of TCM raw materials and “Others” segments.

Operating expenses decreased 38.2% to $299,517 for the quarter ended September 30, 2016, from $484,573 in the year-ago quarter. The decreasing was primarily attributable to the decrease in compensation and related benefits.

Net income for the three months ended September 30, 2016 increased 15.7% to $1.1 million from $933,514 in the same quarter last year. Earnings per diluted share for the three months ended September 30, 2016 was $0.02, in line with the same period last year.

Nine Months 2016 Financial Results

Nine Months Ended
September 30,

Increase

Percentage

2016

2015

(Decrease)

Change

TCM raw materials

$

24,063,798

$

7,712,224

$

16,351,574

212

%

Yew trees

23,246

1,139,946

(1,116,700)

(98)%

Wood ear mushroom

1,439,634

(1,439,634)

(100)%

Handicrafts

97,560

110,131

(12,571)

(11)%

Others

15,162,974

1,904,643

13,258,331

696

%

Total

$

39,347,578

$

12,306,578

$

27,041,000

220

%

Total revenues for the nine months of 2016 increased to $39.3 million from $12.3 million a year ago. Sales of TCM raw materials amounted to 61.2% of total revenues; sales of yew trees amounted to 0.1% of total revenues; sales of wood ear mushroom amounted to 0% of total revenues; sales of handicrafts amounted to 0.2% of total revenues; and sales of others, consisting with yew candles, pine needle extract and dietary supplement, amounted to 38.5% of total revenues.

Gross profit was $4.5 million, or 11.3% of total revenues, compared with $5.3 million, or 42.8% of total revenues for the comparable 2015 quarter. The decrease in the gross profit margin was primarily attributable to the lower gross margin yields of TCM raw materials and “Others” segments.

Operating expenses decreased 33.6% to $956,674 for the nine months ended September 30, 2016, from $1.4 million for the same period last year. The decreasing was primarily attributable to the decreases in compensation and related benefits.

Net income for the nine months of 2016 decreased 11.8% to $3.4 million from $3.9 million for the same period last year. Earnings per diluted share was $0.07, in line with the same period last year.

“Revenue for the quarter increased 194% compared to last year due to the sales increasing in TCM raw materials and “Others” segments which includes the sales of yew candles, pine needle extracts and our dietary supplement with the brand name of Auri Essence”, and therefore offset the decreases in sales of yew trees and wood ear mushroom,” said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group, Inc. The sales of TCM raw materials maintained a strong growth in the past nine months of 2016 as our related party, Yew Pharmaceutical, continues their technology development with yew ingredients, and led to the sales increasing of our TCM segment.”

“Our new B2C E-commerce website is pending to launch due to the function improvements, and we are in progress of doing final testing at this point. We would expect to release the website before January, 2017, and we believe the website operation will become a new source of revenues for the Company in the year of 2017. Meanwhile, we will continue to enrich our product mix and develop more value-added products 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 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.

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

(financial tables follow)

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS

September 30, 2016

December 31, 2015

(Unaudited)

ASSETS

CURRENT ASSETS:

  Cash

$

964,701

$

681,608

  Restricted cash

295,380

303,511

  Accounts receivable

8,564,463

3,857,968

  Accounts receivable – related parties

3,546,845

6,489,495

  Inventories

12,570,532

4,665,549

  Prepaid expenses – related parties

85,252

106,370

  Prepaid expenses and other assets

45,796

64,174

  VAT recoverables

2,554,246

699,258

  Total Current Assets

28,627,215

16,867,933

LONG-TERM ASSETS:

  Long-term inventories, net

14,417,140

12,334,261

  Property and equipment, net

686,583

702,764

  Land use rights and yew forest assets, net

4,893,115

13,906,379

  Total Long-term Assets

19,996,838

26,943,404

  Total Assets

$

48,624,053

$

43,811,337

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

  Accounts payable

$

1,650,084

$

11,345

  Accounts payable – related party

290,506

41,319

  Accrued expenses and other payables

496,988

124,686

  Notes payable

590,760

607,022

  Taxes payable

13,774

14,261

  Due to related parties

827,157

761,236

  Short-term borrowings

2,998,779

3,081,332

  Total Current Liabilities

6,868,048

4,641,201

  Total Liabilities

6,868,048

4,641,201

SHAREHOLDERS’ EQUITY:

Common Stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 shares issued and outstanding at September 30, 2016 and December 31, 2015, respectively)

51,875

51,875

  Additional paid-in capital

9,868,076

9,622,558

  Retained earnings

28,106,385

25,067,733

  Statutory reserves

4,160,781

3,762,288

  Accumulated other comprehensive income (loss) – foreign currency translation adjustment

(431,112)

665,682

  Total Shareholders’ Equity

41,756,005

39,170,136

  Total Liabilities and Shareholders’ Equity

$

48,624,053

$

43,811,337

 

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,

2016

2015

2016

2015

REVENUES:

Revenues

$

7,793,111

$

1,997,998

$

15,283,780

$

5,437,593

Revenues – related party

6,873,988

2,999,203

24,063,798

6,868,985

Total Revenues

14,667,099

4,997,201

39,347,578

12,306,578

COST OF REVENUES:

Cost of revenues

7,650,346

1,900,418

15,085,190

3,807,777

Cost of revenues – related party

5,597,721

1,677,625

19,800,134

3,228,355

Total Cost of Revenues

13,248,067

3,578,043

34,885,324

7,036,132

GROSS PROFIT

1,419,032

1,419,158

4,462,254

5,270,446

OPERATING EXPENSES:

Selling

5,667

10,013

17,754

23,776

General and administrative            

293,850

474,560

938,920

1,417,338

Total Operating Expenses

299,517

484,573

956,674

1,441,114

INCOME FROM OPERATIONS

1,119,515

934,585

3,505,580

3,829,332

OTHER INCOME (EXPENSES):

Interest expense

(39,367)

(33,496)

(108,654)

(51,917)

Government grant

135,322

Other income

390

36,496

40,219

32,023

Total Other Income (Expenses)

(38,977)

3,000

(68,435)

115,428

INCOME BEFORE INCOME TAXES

1,080,538

937,585

3,437,145

3,944,760

PROVISION FOR INCOME TAXES

(4,071)

(47,200)

NET INCOME

$

1,080,538

$

933,514

$

3,437,145

$

3,897,560

COMPREHENSIVE INCOME:

NET INCOME

$

1,080,538

$

933,514

$

3,437,145

$

3,897,560

OTHER COMPREHENSIVE INCOME (LOSS):

Foreign currency translation adjustment

(198,125)

(1,701,546)

(1,096,794)

(1,319,999)

COMPREHENSIVE INCOME

$

882,413

$

(768,032)

$

2,340,351

$

2,577,561

NET INCOME PER COMMON SHARE:

Basic

$

0.02

$

0.02

$

0.07

$

0.07

Diluted

$

0.02

$

0.02

$

0.07

$

0.07

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

51,875,000

52,158,967

51,875,000

52,136,447

Diluted

51,893,930

52,189,711

51,875,000

55,518,924

 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

(UNAUDITED)

For the Nine Months Ended
September 30,

2016

2015

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

3,437,145

$

3,897,560

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

Depreciation

89,410

112,837

Stock-based compensation

245,518

800,954

Stock issued for professional services

3,356

Amortization of land use rights and yew forest assets

8,784,562

1,108,773

Gain on disposal of property and equipment

(32,083)

Changes in operating assets and liabilities:

Accounts receivable

(4,873,750)

(783,741)

Accounts receivable – related parties

2,806,724

339,740

Prepaid expenses and other current assets

(7,999)

(269,309)

Prepaid expenses – related parties

18,519

(375,030)

Due from related party

(13,383)

Inventories

(10,567,924)

(5,191,187)

VAT recoverables

(1,899,393)

(1,105,672)

Accounts payable

1,660,178

Accounts payable – related party

253,723

Accrued expenses and other payables

408,002

95,379

Advances from customers

165,092

Due to related parties

7,471

Taxes payable

(199)

39,506

NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES

361,987

(1,207,208)

CASH FLOWS FROM INVESTING ACTIVITIES:

Purchase of property and equipment

(7,742)

(7,913)

Payment for land use rights and yew forest assets

(1,362,205)

NET CASH USED IN INVESTING ACTIVITIES

(7,742)

(1,370,118)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from short-term borrowings

1,530,105

1,642,360

Repayment of short-term borrowings

(1,530,105)

Proceeds from related party

181

658,255

Repayments to related party

(49,030)

(5,656)

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES

(48,849)

2,294,959

EFFECT OF EXCHANGE RATE ON CASH

(22,303)

(34,090)

NET INCREASE (DECREASE) IN CASH

283,093

(316,457)

CASH – Beginning of period

681,608

487,940

CASH – End of period

$

964,701

$

171,483

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Interest

$

64,383

$

47,017

Income taxes

$

6,460

$

Non-cash investing and financing activities

Operating expenses paid by related parties

$

27,214

$

Reclassification of yew forest assets to inventories

190,817

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SOURCE Yew Bio-Pharm Group, Inc.

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