Yew Bio-Pharm Group Reports 2014 Second Quarter Financial Results

Announces Price Increase for TCM Raw Materials to Support Profitably Objectives

Adds Two New TCM Raw Material Customers

HARBIN, China, August 15, 2014 /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 and products made from yew timber in China, today reported financial results for the three- and six-months ended June 30, 2014.

2014 Second Quarter Results

Three Months Ended June 30,

Percentage

2014

2013

Change

Revenues:

TCM Raw Materials

$1,150,805

$1,270,330

(9.4)%

Yew Trees

872,437

796,653

9.5%

Handicrafts

40,325

39,383

2.4%

Total Revenues

$2,063,567

$2,106,366

(2.0)%

Total revenues for the second quarter of 2014 were $2.06 million, compared with $2.11 million a year ago.

Sales of TCM raw materials amounted to 55.8% of total revenues; sales of yew trees amounted to 42.3% of total revenues; and sales of handicrafts made up the remaining 1.9%.

For the 2014 second quarter, gross profit was $1.64 million, or 79.4% of total revenues, compared with $1.60 million, or 76.0% of total revenues for the comparable 2013 quarter. The increase in the gross profit margin was primarily attributable to higher gross profit margin in the TCM raw materials segment.

Operating expenses decreased 20.5% to $221,000 for the quarter ended June 30, 2014, from $278,000 in the year-ago quarter. The decrease was primarily related to overall cost reduction and operational efficiency.

Net income for the three-months ended June 30, 2014 increased 7.2% to $1.4 million from $1.3 million in the same quarter last year. Earnings per diluted share were $0.03, in line with the same period last year.

Subsequent to the quarter, the company signed and closed two new TCM raw material contracts with Shenzhen HongYangSiHai Trading Company and Harbin QiHuiCheng Trading Company for a combined value of more than $350,000.

“Revenue for the quarter was in line with last year with growth in the yew trees segment offset the seasonal slowdown of TCM raw materials,” said Mr. Zhiguo Wang, Chairman and Chief Executive Officer of Yew Bio-Pharm Group. “We are pleased with the performance from our yew tree regional sales agent, Shenzhen DongFangShangCheng Trading Company whom we signed a one year contract, which contributed to our improvement in this segment.

“To accelerate our growth we are working to expand and diversify our customer base, and the two new TCM raw materials contracts are indicative of such progress. In addition, to improve profitability we implemented a price increase for our TCM raw materials effective August, which is expected to have a positive impact on both revenues and gross profit through the remainder of 2014 and beyond,” Wang added.

Six Month 2014 Financial Results

Six Months Ended June 30,

Percentage

2014

2013

Change

Revenues:

TCM Raw Materials

$2,194,785

$2,166,491

1.3%

Yew Trees

1,836,743

1,653,607

11.1%

Handicrafts

100,016

85,208

17.4%

Total Revenues

$4,131,544

$3,905,306

5.8 %

Total revenues for the first six months of 2014 increased to $4.1 million from $3.9 million a year ago. Sales of TCM raw materials amounted to 53.1% of total revenues; sales of yew trees amounted to 44.5% of total revenues; and sales of handicrafts made up the remaining 2.4%.

Gross profit was $3.2 million, or 76.9% of total revenues, compared with $2.8 million, or 72.2% of total revenues for the comparable 2013 quarter. The increase in the gross profit margin was primarily attributable to an increase in profit margin for TCM raw materials, offset by a decrease in profit margin in handicrafts.

Operating expenses decreased 30.1% to $388,000 from $556,000 for the same period last year.

Net income for the first six months of 2014 increased 23.2% to $2.8 million from $2.3 million for the same period last year. Earnings per diluted share were $0.06, compared to $0.05 for the same period last year.

At June 30, 2014 the company had approximately $230,000 in cash and $1.5 million in accounts receivables.

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. To learn more, please visit http://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.

Company Contacts:
Henry Pang
Yew Bio-Pharm Group, Inc.
Tel: (702) 487-4683
hpang@yewbiopharm.com

Investor Relations Contacts:
Judy Lin Sfetcu
PondelWilkinson Inc.
Tel: (310) 279-5980
investor@pondel.com

(financial tables follow)

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEETS

June 30,

December 31,

2014

2013

(Unaudited)

ASSETS

CURRENT ASSETS:

Cash

$

230,678

$

1,159,611

Accounts receivable

1,325,680

418,875

Accounts receivable – related party

138,039

377,821

Inventories

878,863

1,089,087

Prepaid expenses – related party

19,786

34,031

Prepaid expenses and other assets

23,113

2,697

Total Current Assets

2,616,159

3,082,122

LONG-TERM ASSETS:

Inventories, net of current portion

10,018,965

10,245,146

Property and equipment, net

931,651

1,033,078

Land use rights and yew forest assets, net

20,548,091

20,953,562

Total Long-term Assets

31,498,707

32,231,786

Total Assets

$

34,114,866

$

35,313,908

LIABILITIES AND SHAREHOLDERS’ EQUITY

CURRENT LIABILITIES:

Accounts payable

$

42,304

$

Accrued expenses and other payables

134,959

136,713

Taxes payable

6,309

10,232

Due to related parties

1,044,742

4,850,637

Total Current Liabilities

1,228,314

4,997,582

Total Liabilities

1,228,314

4,997,582

COMMITMENTS AND CONTINGENCIES

SHAREHOLDERS’ EQUITY:

Common Stock ($0.001 par value; 140,000,000 shares authorized; 50,000,000 and 50,000,000 issued and outstanding at June 30, 2014 and December 31, 2013, respectively)

50,000

50,000

Additional paid-in capital

8,058,165

8,058,165

Retained earnings

19,165,764

16,664,138

Statutory reserves

2,888,204

2,597,118

Accumulated other comprehensive income – foreign currency translation adjustment

2,724,419

2,946,905

Total Shareholders’ Equity

32,886,552

30,316,326

Total Liabilities and Shareholders’ Equity

$

34,114,866

$

35,313,908

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME

Three Months Ended
June 30,

Six Months Ended
June 30,

2014

2013

2014

2013

REVENUES:

Revenues

$

1,780,535

$

1,143,880

$

3,394,253

$

2,584,871

Revenues – related party

283,032

962,486

737,291

1,320,435

Total Revenues

2,063,567

2,106,366

4,131,544

3,905,306

COST OF REVENUES:

Cost of revenues

354,456

206,310

769,072

701,969

Cost of revenues – related party

70,479

299,212

183,597

382,222

Total Cost of Revenues

424,935

505,522

952,669

1,084,191

GROSS PROFIT

1,638,632

1,600,844

3,178,875

2,821,115

OPERATING EXPENSES:

Selling

661

6,079

2,421

11,693

General and administrative

220,361

271,908

385,997

543,869

Total Operating Expenses

221,022

277,987

388,418

555,562

INCOME FROM OPERATIONS

1,417,610

1,322,857

2,790,457

2,265,553

OTHER INCOME (EXPENSES):

Interest income

55

42

291

84

Other income (expense)

(194)

(200)

1,964

(617)

Total Other Income (Expenses)

(139)

(158)

2,255

(533)

NET INCOME

$

1,417,471

$

1,322,699

$

2,792,712

$

2,265,020

COMPREHENSIVE INCOME:

NET INCOME

$

1,417,471

$

1,322,699

$

2,792,712

$

2,265,020

OTHER COMPREHENSIVE INCOME:

Foreign currency translation adjustment

35,482

442,871

(222,486)

597,523

COMPREHENSIVE INCOME

$

1,452,953

$

1,765,570

$

2,570,226

$

2,862,543

NET INCOME PER COMMON SHARE:

Basic

$

0.03

$

0.03

$

0.06

$

0.05

Diluted

$

0.03

$

0.03

$

0.04

$

0.05

WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:

Basic

50,000,000

50,000,000

50,000,000

50,000,000

Diluted

50,000,000

50,000,000

64,872,148

50,000,000

YEW BIO-PHARM GROUP, INC. AND SUBSIDIARIES

CONSOLIDATED STATEMENTS OF CASH FLOWS

For the Six Months Ended
June 30,

2014

2013

CASH FLOWS FROM OPERATING ACTIVITIES:

Net income

$

2,792,712

$

2,265,020

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

91,862

102,954

Amortization of land use rights and yew forest assets

255,678

178,817

Loss (gain) on disposal of fixed assets

(2,142)

420

Changes in operating assets and liabilities:

Accounts receivable

(911,790)

(1,019,696)

Accounts receivable – related party

237,626

(1,184,390)

Prepaid expenses and other current assets

(20,473)

(24,082)

Due from related party

14,034

13,801

Inventories

358,413

(186,105)

Accounts payable

42,398

2,957

Accrued expenses and other payables

(1,100)

(14,358)

Taxes payable

(3,865)

(2,824)

NET CASH PROVIDED BY OPERATING ACTIVITIES

2,853,353

132,514

CASH FLOWS FROM INVESTING ACTIVITIES:

Proceeds from disposal of property and equipment

5,000

Purchase of property and equipment

(3,084)

Loan to related party

2,448

Payments for land use rights and yew forest assets

(3,755,629)

(493,878)

NET CASH USED IN INVESTING ACTIVITIES

(3,750,629)

(494,514)

CASH FLOWS FROM FINANCING ACTIVITIES:

Proceeds from related party advances

1,221

Repayments for related parties advances

(25,674)

NET CASH USED IN FINANCING ACTIVITIES

(24,453)

EFFECT OF EXCHANGE RATE ON CASH

(7,204)

5,200

NET INCREASE (DECREASE) IN CASH

(928,933)

(356,800)

CASH – beginning of period

1,159,611

386,821

CASH – end of period

$

230,678

$

30,021

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:

Cash paid for:

Interest

$

$

Income taxes

$

$

Non-cash investing and financing activities

Reclassification of yew forest assets to inventories

$

1,658

$