EL MONTE, Calif., Aug. 14, 2018 (GLOBE NEWSWIRE) -- 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 essential oil in China, today reported financial results for three- and six-months ended June 30, 2018.

2018 Second Quarter Results

 Three Months Ended June 30,Percentage
  2018 2017Change
 Revenues:    
TCM Raw Materials$13,053,333$11,536,78613.15% 
Yew Trees 32,501 -100.00% 
Handicrafts 206 1,004(79.48)% 
Others 1,734,328 4,066,586(57.35)% 
Total Revenues$14,820,368$15,604,376(5.02)% 

Total revenues for the second quarter of 2018 decreased 5.02% to $14.8 million from $15.6 million a year ago. Sales of TCM raw materials amounted to 88.08% of total revenues; sales of Yew Trees amounted to 0.22% of total revenues; sales of Handicrafts amounted to 0.00% of total revenues and sales of “Others” segment consisting with the yew essential oil candles, pine needle extracts, yew essential oil soaps, complex Taxus Cuspidate and northeast yew extract amounted to 11.70% of total revenues.

For the three months ended June 30, 2018, gross profit was $3.4 million, or 22.6% of total revenues, compared with $10.6 million, or 67.9% of total revenues for the comparable 2017 quarter. The decrease in the gross profit margin was primarily attributable to the decreased gross margin yields of TCM raw materials.

Operating expenses increased 329.2% to $1,287,300 for the quarter ended June 30, 2018, from $299,915 in the year-ago quarter. The increasing was primarily attributable to the increases in the stock-based compensation.

Net income for the three months ended June 30, 2018 decreased 84.3% to $1.6 million from $10.3 million in the same quarter last year due to the increase in cost of revenues from TCM raw material. Earnings per diluted share for the three months ended June 30, 2018 was $0.03, as compared to $0.19 for the three months ended June 30, 2017.

Six Month 2018 Financial Results

 Six Months Ended June 30,Percentage
  2018 2017Change
Revenues:   
TCM Raw Materials$14,748,730$14,071,0474.82%
Yew Trees 32,501 -100.00%
Handicrafts 1,308 2,368(44.76)%
Others 3,068,967 9,406,425(67.37)%
Total Revenues$17,851,506$23,479,840(23.97)%

Total revenues for the first six months of 2018 decreased to $17.9 million from $23.5 million a year ago. Sales of TCM raw materials amounted to 82.62% of total revenues; sales of Yew Trees amounted to 0.18% of total revenues; sales of Handicrafts amounted to 0.01% of total revenues and sales of “Others” segment consisting with yew essential oil candles, pine needle extracts, yew essential oil soaps, complex Taxus Cuspidate and northeast yew extract amounted to 17.19% of total revenues.

For the six months ended June 30, 2018, gross profit was $3.8 million, or 21.5% of total revenues, compared with $11.1 million, or 47.3% of total revenues for the comparable first six months of 2017. The decrease in the gross profit margin was primarily attributable to the decreased gross margin yields of TCM raw materials.

Operating expenses increased 158.6% to $1,547,172 for the six months ended June 30, 2018, from $598,318 for the same period last year. The increasing was primarily attributable to the increase in stock-based compensation.

Net income for the first six months of 2018 decreased 83.1% to $1.8 million from $10.4 million for the same period last year. Earnings per diluted share was $0.03, as compared to $0.19 for the six months ended June 30, 2017.

"Our total revenues decreased for the six months ended June 30, 2018 compared with the same period of 2017 was mainly due to the sales decreasing of Others segment.” said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group, Inc. “As a newly added category of the company, we developed a series of yew tree derivate products such as yew essential oil soap and candle. These products have contributed a great portion of total revenues to the company since 2016. In order to explore the market demand, we attended the Las Vegas ASD trade show on July 29th, 2018, and we directly communicated to the retailers/wholesalers in the show as to our products, designs and functions. We also received highly positive responses from the customers, and we are following some potential customers after the show.”

“As we mentioned in previous reports, we are reserving the yew tree resource in order to manufacture our TCM raw materials. However, we still have to cut down certain whole grown yew trees to produce TCM raw materials to fulfill the increased demands. This will increase our TCM raw materials unit cost extremely since we picked the leaves from our grown yew trees to manufacture TCM raw materials normally. In order to resolve the issue, on June 14, 2018, we entered into a Joint Venture Planting Agreement with Qing’An National Forestry Administration, pursuant to which the Qing’An Forestry has given HDS access to 10,729.5 mu of forest land located in Qing’An County to develop yew tree forests and produce yew seedlings. In addition, the Company is required to plant yew trees on this land from June 14, 2018 to June 13, 2038. Any gross revenues from the planting of yew tree shall be distributed 80% to the Company and 20% to the Qing’An Forestry. We believe this will be a great benefit for the company, which could provide more yew trees and increase our potential revenues.”

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

  June 30,
2018
  December 31,
2017
 
  (Unaudited)    
ASSETS      
CURRENT ASSETS:      
Cash $772,769  $859,830 
Accounts receivable  60,127   9,881,914 
Accounts receivable - related parties  12,296,807   21,847,733 
Inventories, net  8,385,394   2,579,190 
Prepaid expenses - related parties  43,202   57,202 
Prepaid expenses and other assets  58,176   37,519 
VAT recoverables  990,403   170,564 
Total Current Assets  22,606,878   35,433,952 
         
LONG-TERM ASSETS:        
Long-term prepaid expenses - related party  357,904   - 
Long-term inventories, net  1,396,072   10,546,648 
Property and equipment, net  540,854   579,557 
Land use rights and yew forest assets, net  28,455,098   6,369,938 
         
Total Long-term Assets  30,749,928   17,496,143 
         
Total Assets $53,356,806  $52,930,095 
         
LIABILITIES AND SHAREHOLDERS’ EQUITY        
CURRENT LIABILITIES:        
Accounts payable $167,928  $152,812 
Accounts payable - related parties  -   357,708 
Accrued expenses and other payables  421,710   162,619 
Taxes payable  5,522   5,574 
Due to related parties  586,295   619,999 
Short-term borrowings  4,666,779   6,099,876 
         
Total Current Liabilities  5,848,234   7,398,588 
         
NONCURRENT LIABILITIES:        
Deferred income  353,522   359,646 
Total Noncurrent Liabilities  353,522   359,646 
         
Total Liabilities  6,201,756   7,758,234 
         
SHAREHOLDERS’ EQUITY:        
Common Stock ($0.001 par value; 140,000,000 shares authorized; 51,875,000 shares issued and outstanding at June 30, 2018 and December 31, 2017)  51,875   51,875 
Additional paid-in capital  11,428,412   10,363,412 
Retained earnings  32,049,852   30,287,658 
Statutory reserves  3,762,288   3,762,288 
Accumulated other comprehensive income (loss) - foreign currency translation adjustment  (137,377)  706,628 
         
Total Shareholders’ Equity  47,155,050   45,171,861 
         
Total Liabilities and Shareholders’ Equity $53,356,806  $52,930,095 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME (LOSS)
(UNAUDITED)

  For the Three Months Ended
June 30,
  For the Six Months Ended
June 30,
 
  2018  2017  2018  2017 
REVENUES:            
Revenues $142,412  $4,067,590  $174,670  $9,408,793 
Revenues - related parties  14,677,956   11,536,786   17,676,836   14,071,047 
                 
Total Revenues  14,820,368   15,604,376   17,851,506   23,479,840 
                 
COST OF REVENUES:                
Cost of revenues  89,337   4,058,847   102,243   9,360,063 
Cost of revenues - related parties  11,377,474   955,866   13,916,411   3,010,134 
                 
Total Cost of Revenues  11,466,811   5,014,713   14,018,654   12,370,197 
                 
GROSS PROFIT  3,353,557   10,589,663   3,832,852   11,109,643 
                 
OPERATING EXPENSES:                
Selling  6,989   66   7,829   331 
General and administrative  1,280,311   299,849   1,539,343   597,987 
                 
Total Operating Expenses  1,287,300   299,915   1,547,172   598,318 
                 
INCOME FROM OPERATIONS  2,066,257   10,289,748   2,285,680   10,511,325 
                 
OTHER INCOME (EXPENSES):                
Interest expense  (69,077)  (35,382)  (137,110)  (87,345)
Other income  3,022   1,147   90,325   1,437 
Exchange loss  (387,014)  -   (476,701)  - 
                 
Total Other Expenses  (453,069)  (34,235)  (523,486)  (85,908)
                 
INCOME BEFORE PROVISION FOR INCOME TAXES  1,613,188   10,255,513   1,762,194   10,425,417 
PROVISION FOR INCOME TAXES  -   (604)  -   (604)
NET INCOME $1,613,188  $10,254,909  $1,762,194  $10,424,813 
                 
COMPREHENSIVE INCOME:                
NET INCOME $1,613,188  $10,254,909  $1,762,194  $10,424,813 
OTHER COMPREHENSIVE INCOME (LOSS):                
Foreign currency translation adjustment  (2,400,809)  775,601   (844,005)  1,079,481 
                 
COMPREHENSIVE INCOME (LOSS) $(787,621) $11,030,510  $918,189  $11,504,294 
                 
NET INCOME PER COMMON SHARE:                
Basic $0.03  $0.20  $0.03  $0.20 
Diluted $0.03  $0.19  $0.03  $0.19 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:                
Basic  51,875,000   51,875,000   51,875,000   51,875,000 
Diluted  55,866,258   53,041,145   55,502,609   55,034,527 

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)

  For the Six Months Ended
June 30,
 
  2018  2017 
CASH FLOWS FROM OPERATING ACTIVITIES:      
Net income $1,762,194  $10,424,813 
Adjustments to reconcile net income to net cash provided by operating activities:        
Depreciation  30,050   46,498 
Stock-based compensation  1,065,000   67,348 
Amortization of land use rights and yew forest assets  598,366   70,717 
Changes in operating assets and liabilities:        
Accounts receivable  10,037,898   2,693,028 
Accounts receivable - related parties  9,542,974   (4,421,530)
Prepaid expenses and other current assets  (21,862)  (5,367)
Prepaid expenses - related parties  13,543   11,816 
Inventories, net  3,297,088   (7,625,415)
VAT recoverables  (855,373)  292,731 
Accounts payable  15,301   (26,246)
Accounts payable - related parties  (365,562)  (1,978,078)
Accrued expenses and other payables  272,245   302,587 
Due to related parties  (32,370)  (51,602)
Deferred income  -   218,204 
Taxes payable  (52)  (11,869)
         
NET CASH PROVIDED BY OPERATING ACTIVITIES  25,359,440   7,635 
         
CASH FLOWS FROM INVESTING ACTIVITIES:        
Prepayments made to related party for purchase of yew forest assets  (372,098)  - 
Purchase of land use rights and yew forest assets  (23,681,125)  (679,387)
         
NET CASH USED IN INVESTING ACTIVITIES  (24,053,223)  (679,387)
         
CASH FLOWS FROM FINANCING ACTIVITIES:        
Proceeds from short-term borrowings  3,156,000   6,501,105 
Repayment of short-term borrowings  (4,432,593)  (3,617,764)
Repayments to related party  -   (75,875)
         
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES  (1,276,593)  2,807,466 
         
EFFECT OF EXCHANGE RATE ON CASH  (116,685)  22,849 
         
NET INCREASE (DECREASE) IN CASH  (87,061)  2,158,563 
         
CASH - Beginning of period  859,830   278,991 
         
CASH - End of period $772,769  $2,437,554 
         
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:        
Cash paid for:        
Interest $104,208  $86,076 
Income taxes $-  $18,015 
NON-CASH INVESTING AND FINANCIANG ACTIVITIES        
Operating expenses paid by related party $4,555  $27,015 
Reclassification of inventories to land use rights and yew forest assets $-  $4,257,122 

 

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