SkyPeople Fruit Juice Reports First Quarter 2013 Financial Results

PR Newswire

XI'AN, China, May 14, 2013 /PRNewswire-FirstCall/ -- SkyPeople Fruit Juice, Inc. (SPU) ("SkyPeople" or "the Company"), a producer of fruit juice concentrates, fruit juice beverages and other fruit-related products, today announced its financial results for the first quarter ended March 31, 2013.

First Quarter 2013 Highlights:

  • Revenue was $18.6 million, an increase of 24% year-over-year
  • Gross profit was $7.6 million, an increase of 60% year-over-year
  • Gross profit margin was 41% as compared to 32% for the same period of 2012.
  • Income from operations was $5.5 million, an increase of 108% year-over-year
  • Net income attributable to the Company was $3.8 million, an increase of 99% year-over-year
  • Revenue from the fruit juice beverage segment was $8.6 million, an increase of 155% year-over-year
  • Cash and cash equivalents were $91.3 million as of March 31, 2013

"We are very pleased to report strong financial results for the first quarter of 2013 as revenue grew 24% from the comparable year-ago quarter and net income almost doubled as our margins improved. The quarter was highlighted by the growth of our fruit juice beverages segment primarily in China. We anticipate further growth for this segment as we expand our domestic footprint and market to more highly populated Chinese cities. We currently sell our fruit beverages to more than 20,000 retail stores in approximately 20 provinces," said Mr. Hongke Xue, Chief Executive Officer of SkyPeople.

"Also, as recently announced we entered into an agreement with the Managing Committee of Mei County National Kiwi Fruit Wholesale Trading Center, which has been authorized by the People's Government of Mei County to be in charge of the construction and administration of the Mei County National Kiwi Fruit Wholesale Trading Center (the "Trading Center") to establish kiwi processing facilities which we believe has excellent potential and will strengthen our competitive positioning in this important product segment. As announced in the fourth quarter of last year, we entered into an agreement to develop orange products in Hubei Province since we believe that there is a shortage of such products in the market. We believe that these two initiatives augment our existing product platform with the potential of driving additional revenue while mitigating both the regional and seasonal cyclicality of our products," Mr. Hongke Xue concluded.

First Quarter 2013 Financial Results

Revenue for the three months ended March 31, 2013 was $18.6 million, an increase of 24% as compared to $15.0 million for the same period in 2012. This increase was primarily due to an increase in sales of fruit juice beverages, concentrated pear juice and fresh fruits and vegetables, which was partially offset by a decrease in revenue generated from sales of the apple-related products and kiwi-related products. The revenue attributable to the fruit beverages segment, in particular, was $8.6 million for the first quarter of 2013, an increase of 155% as compared to $3.4 million for the same period of 2012. The fruit juice beverages segment comprised 46% of total Company revenue for the first quarter for 2013 as compared to 22% for the same period of 2012, and so was a large factor in the increase in revenue for the first quarter of 2013 as compared to the same period in 2012.

First Quarter 2013 Revenue by Segment (in thousands)


Three Months ended March 31,




2013


2012


% of change

Concentrated apple juice and apple aroma

636


2,508


(75)%

Concentrated kiwifruit juice and kiwi puree

3,419


3,761


(9)%

Concentrated pear juice

5,173


4,767


9%

Fruit juice beverages

8,585


3,370


155%

Fresh fruits and vegetables

798


588


36%

Total

18,611


14,994


24%

First Quarter 2013 Gross Profit by Segment (in thousands)

Gross profit was $7.6 million in the first quarter of 2013, an increase of 60% from $4.8 million for the same period in 2012.  The Company's total gross profit margin was 41% in the first quarter of 2013 as compared to 32% for the same period of 2012, primarily due to an adjustment of product mix. The fruit juice beverages segment's gross profit margin increased to 41% in the first quarter of 2013 from 25% for the same period of 2012. This had the effect of increasing the total gross profit levels and gross profit margin for the first quarter of 2013 as compared to the same period of 2012.


Three months ended March 31,


2013


2012


Gross
profit


Gross
margin


Gross
profit


Gross
margin

Concentrated apple juice and
apple aroma

31


5%


414


16%

Concentrated kiwifruit juice and
kiwi puree

2,114


62%


1,687


45%

Concentrated pear juice

1,599


31%


1,534


32%

Fruit juice beverages

3,512


41%


855


25%

Fresh fruits and vegetables

385


48%


296


50%

Total

7,641


41%


4,786


32%

Operating expenses for the first quarter of fiscal 2013 was $2.1 million, or 12% of sales, which were at the same level for that of the same period of 2012, where operating expenses represented 15% of sales. General and administrative expenses decreased 12% to $1.3 million in the first quarter of 2013 as compared to $1.5 million for the same period of 2012, mainly due to the continued decrease in legal fees related to currently pending litigations. Selling expenses increased 41% to $0.7 million as compared to $0.5 million the same period of 2012, mainly due to an increase in the headcount of the Company's sales force. Research and development expenses decreased 31% to $0.1 million in the first quarter of 2013 as compared to $0.14 million for the same period of 2012 as former research and development agreements the Company had with various institutions expired in January of 2013. During the first quarter of 2013, the Company renewed/entered into several new research and development agreements with outside research institutions. Currently, the Company has four research and development agreements that are in effect.

Income from operations was $5.5 million for the first quarter of 2013, an increase of 108% as compared to $2.6 million for the same period in 2012. 

Net income attributable to SkyPeople Fruit Juice was $3.8 million for the first quarter of 2013, an increase of 99% as compared to $1.9 million for the same period in 2012, while diluted earnings per share was $0.14, an increase of 100% as compared to $0.07 for the same period in 2012.

Financial Condition

As of March 31, 2013, the Company had $91.3 million in cash and cash equivalents, up from $77.6 million as of fiscal year end 2012. The Company's working capital was $108.1 million. As of March 31, 2013, the Company had total liabilities of $22.6 million, which included $8.5 million in short-term bank loans and a $4.0 million short-term loan to a related party. As of March 31, 2013, shareholders' equity attributable to SkyPeople Fruit Juice was $160.7 million as compared to $156.5 million as of fiscal year end of 2012.

For the first quarter ended March 31, 2013, the Company's operating activities generated a net cash inflow of $13.2 million, as compared to $14.8 million for the same period in 2012. Net cash used in investing activities were $0.4 million for the quarter ended March 31, 2013 as compared to $1.3 million for the same period in 2012. For the first quarter ended March 31, 2013, cash flow generated from financing activities totaled $0.8 million as compared to $2.0 million for the same period in 2012. Historically, the Company has financed its capital expenditures and other operating expenses through cash on hand, operating cash flows and bank loans.

During the first quarter of 2013, the Company entered into a loan agreement with SkyPeople International Holdings Group Limited ("SkyPeople International"), which indirectly holds a 50.2% interest in the Company. Mr. Yongke Xue, the Chairman of the Board and Mr. Hongke Xue, its Chief Executive Officer and a director, indirectly and beneficially own 80.0% and 9.4% of equity interest in SkyPeople International, respectively. This entity has extended to the Company a one-year unsecured term loan of $8.0 million at an interest rate of 6% per year; during first quarter of 2013, the Company received $4.0 million of this amount.

Recent Developments

On April 3, 2013, SkyPeople (China) entered into an investment agreement with the Managing Committee of Mei County National Kiwi Fruit Wholesale Trading Center, which has been authorized by the People's Government of Mei County to be in charge of the construction and administration of the Mei County National Kiwi Fruit Wholesale Trading.

Under the investment agreement, the parties agreed to invest and establish a kiwi fruit comprehensive deep processing zone and kiwi fruit and fruit-related materials trading zone in Yangjia Village, Changxing Town of Mei County with a total planned area of total planned area of 286 mu (approximately 47 acres).

Pursuant to the investment agreement, the Company will be responsible for construction and financing with a total investment of RMB 445.6 million (approximately $71.9 million) in buildings and equipment.  In addition, the Company agreed to pay a fee of RMB 0.3 million per mu for the land use rights.  

Conference Call

The Company will hold a conference call on Thursday, May 16, 2013 at 9:00 am Eastern Time to discuss its financial results for the first quarter ended March 31, 2013. The Company's Chairman, Mr. Yongke Xue, and Chief Financial Officer, Mr. Xin Ma, will host the call.

To attend the live conference call, please dial in at least 10 minutes before the call to ensure timely participation.  Please use the dial-in information below.  When prompted by the operator, mention the conference Pass Code.

Date:

Thursday, May 16, 2013

Time:

9:00 am Eastern Time, US

Conference Line Dial-In:                          

+1-855-880-8437

International Dial-In:

+1-931-229-4159

Conference Pass Code:

68990185

To access the replay, please dial 1-855-859-2056 within the United States or 1-404-537-3406 when dialing internationally, and enter the pass code 68990185 for the replay. The replay will be available on May 16, 2013 at 12:00 pm.

About SkyPeople Fruit Juice, Inc.

SkyPeople Fruit Juice, Inc., a Florida company, through its wholly-owned subsidiary Pacific Industry Holding Group Co., Ltd. ("Pacific"), a Vanuatu company, and SkyPeople Juice International Holding (HK) Ltd., a company organized under the laws of Hong Kong Special Administrative Region of the People's Republic of China and a wholly owned subsidiary of Pacific, holds 99.78% ownership interest in SkyPeople Juice Group Co., Ltd. ("SkyPeople (China)"). SkyPeople (China), together with its operating subsidiaries in China, is engaged in the production and sales of fruit juice concentrates, fruit beverages, and other fruit related products in the PRC and overseas markets. Its fruit juice concentrates are sold to domestic customers and exported directly or via distributors. Fruit juice concentrates are used as a basic ingredient component in the food industry. Its brands, "Hedetang" and "SkyPeople," which are registered trademarks in the PRC, are positioned as high quality, healthy and nutritious end-use juice beverages. For more information, please visit http://www.skypeoplefruitjuice.com.

Safe Harbor Statement

Certain of the statements made in this press release are "forward-looking statements" within the meaning and protections of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. Forward-looking statements include statements with respect to our beliefs, plans, objectives, goals, expectations, anticipations, assumptions, estimates, intentions, and future performance, and involve known and unknown risks, uncertainties and other factors, which may be beyond our control, and which may cause the actual results, performance, capital, ownership or achievements of the Company to be materially different from future results, performance or achievements expressed or implied by such forward-looking statements. All statements other than statements of historical fact are statements that could be forward-looking statements. You can identify these forward-looking statements through our use of words such as "may," "will," "anticipate," "assume," "should," "indicate," "would," "believe," "contemplate," "expect," "estimate," "continue," "plan," "point to," "project," "could," "intend," "target" and other similar words and expressions of the future.

All written or oral forward-looking statements attributable to us are expressly qualified in their entirety by this cautionary notice, including, without limitation, those risks and uncertainties described in our annual report on Form 10-K for the year ended December 31, 2012 and otherwise in our SEC reports and filings, including the final prospectus for our offering. Such reports are available upon request from the Company, or from the Securities and Exchange Commission, including through the SEC's Internet website at http://www.sec.gov. We have no obligation and do not undertake to update, revise or correct any of the forward-looking statements after the date hereof, or after the respective dates on which any such statements otherwise are made.

For more information, please contact:

 

COMPANY          

 INVESTOR RELATIONS            

Xin Ma, Chief Financial Officer  

 David Rudnick, Account Manager

SkyPeople Fruit Juice, Inc.       

 CCG Investor Relations

Tel: China + 86 - 29-8837-7161      

 Tel: US +1- 646-626-4172

Email: oliver.x.ma@skypeoplefruitjuice.com   

  Email: david.rudnick@ccgir.com

Web: http://www.skypeoplefruitjuice.com/    

  Web: http://www.ccgir.com/

 

-Financial Tables Follow-

 

SKYPEOPLE FRUIT JUICE, INC.

CONSOLIDATED BALANCE SHEETS




March 31, 2013


December 31, 2012




(Unaudited)




ASSETS














CURRENT ASSETS







    Cash and cash equivalents


$

91,320,803


$

77,560,278

    Accounts receivables, net of allowance of  
    $46,766 and $46,643 as of March 31, 2013 and
    December 31, 2012, respectively



31,083,435



49,435,961

    Other receivables



465,725



201,417

    Inventories



7,582,226



7,278,191

    Deferred tax assets



147,126



90,576

    Advances to suppliers and other current assets



141,158



71,536

TOTAL CURRENT ASSETS



130,740,473



134,637,959








PROPERTY, PLANT AND EQUIPMENT, NET



51,851,976



52,180,097

LAND USE RIGHT, NET



7,693,256



7,718,363

OTHER ASSETS



378,137



682,592

TOTAL ASSETS


$

190,663,842


$

195,219,011








LIABILITIES














CURRENT LIABILITIES







    Accounts payable


$

7,127,984


$

14,399,282

    Accrued expenses



1,540,894



2,050,675

    Income tax payable



1,347,111



3,127,245

    Advances from customers



127,861



530,437

    Short-term loan - related party



4,000,000



-

    Short-term bank loans



8,502,289



11,661,761

TOTAL CURRENT LIABILITIES


$

22,646,139


$

31,769,400








SHAREHOLDERS' EQUITY














SkyPeople Fruit Juice, Inc, Stockholders' equity







    Series B Preferred stock, $0.001 par value,
10,000,000 shares authorized, Nil shares issued and
outstanding as of March 31, 2013 and December 31,
2012, respectively



-



-

    Common stock, $0.001 par value; 66,666,666
    shares authorized; 26,661,499 shares and 
    26,661,499 shares issued and outstanding as of,
    March 31, 2013 and December 31, 2012,
    respectively



26,661



26,661

    Additional paid-in capital



59,189,860



59,189,860

    Retained earnings



86,611,733



82,793,585

    Accumulated other comprehensive income



14,874,872



14,500,860

    Total SkyPeople Fruit Juice, Inc. stockholders'
    equity



160,703,126



156,510,966

    Non-controlling interests



7,314,577



6,938,645

TOTAL STOCKHOLDERS' EQUITY



168,017,703



163,449,611

TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY


$

190,663,842


$

195,219,011








The notes in the Company's 10-Q are an integral part of these consolidated financial statements.

 


SKYPEOPLE FRUIT JUICE, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)





For the Three Months Ended March 31,



2013


2012

Revenue


$

18,611,456


$

14,993,500

Cost of goods sold



10,970,558



10,207,501

Gross profit



7,640,898



4,785,999








Operating Expenses







    General and administrative expenses



1,305,914



1,477,604

    Selling expenses



741,166



525,334

    Research and development expenses



98,622



142,685

Total operating expenses



2,145,702



2,145,623








Income from operations



5,495,196



2,640,376








Other income (expenses)







    Interest income



71,579



69,689

    Subsidy income



350,974



433,504

    Interest expenses



(277,023)



(154,812)

    Others expenses



-



(968)

Total other income



145,530



347,413








Income before income tax



5,640,726



2,987,789

    Income tax provision



1,483,865



928,380

Net income



4,156,861



2,059,409








Less: Net income attributable to non-controlling
interests



338,713



140,251








NET INCOME ATTRIBUTABLE TO
SKYPEOPLE FRUIT JUICE, INC.


$

3,818,148


$

1,919,158








Earnings per share:







    Basic earnings per share


$

0.14


$

0.07

    Diluted earnings per share


$

0.14


$

0.07








Weighted average number of shares
outstanding







    Basic



26,661,499



25,690,402

    Diluted



26,661,499



26,661,499








Comprehensive Income







Net income


$

4,156,861


$

2,059,409

Foreign currency translation adjustment



411,231



156,571

Total Comprehensive income


$

4,568,092


$

2,215,980

Comprehensive income attributable to
non-controlling interests



375,932



146,732

Comprehensive income attributable to
SkyPeople Fruit Juice, Inc.


$

4,192,160


$

2,069,248








The notes in the Company's 10-Q are an integral part of these consolidated financial statements.

 

SKYPEOPLE FRUIT JUICE, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)




For the Three Months Ended March 31,



2013


2012








CASH FLOWS FROM OPERATING ACTIVITIES







Net income


$

4,156,861


$

2,059,409

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







    Depreciation and amortization



863,343



706,064

    Deferred income tax assets



(56,550)



60,515

Changes in operating assets and liabilities







    Accounts receivable



18,455,170



14,225,403

    Other receivable



(263,398)



2,009

    Advances to suppliers and other current assets



(69,496)



(109,276)

    Inventories



107,472



1,163,961

    Accounts payable



(7,298,251)



(875,022)

    Accrued expenses



(513,157)



(1,233,484)

    Income tax payable



(1,785,680)



(1,055,393)

    Advances from customers



(403,363)



(178,673)

Net cash provided by operating activities



13,192,951



14,765,513








CASH FLOWS FROM INVESTING ACTIVITIES







    Additions to property, plant and equipment



(428,692)



(1,320,608)

    Prepayment for other assets



(9,600)



(13,621)

Net cash used in investing activities



(438,292)



(1,334,229)








CASH FLOWS FROM FINANCING ACTIVITIES







    Increase in restricted cash



-



284,361

    Short-term notes payable



-



(284,361)

    Proceeds from related party loan



4,000,000



-

    Proceeds from short-term bank loans



-



3,170,879

    Repayment of short-term bank loans



(3,185,474)



(1,139,578)

Net cash provided by (used in) financing activities



814,526



2,031,301








Effect of change in exchange rate



191,340



96,897








NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS



13,760,525



15,559,482

    Cash and cash equivalents, beginning of year



77,560,278



61,154,007

    Cash and cash equivalents, end of year



91,320,803



76,713,489








SUPPLEMENTAL DISCLOSURES OF CASH
 FLOW INFORMATION







    Cash paid for interest



250,722



154,812

    Cash paid for income taxes



3,326,095



1,923,258








SUPPLEMENTARY DISCLOSURE OF
SIGNIFICANT NON-CASH TRANSACTION







    Change in fair value of warrant liability







    Transferred from other assets to property, plant and
equipment and construction in process



315,394



5,158,425








The notes in the Company's 10-Q are an integral part of these consolidated financial statements.

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