SKYPEOPLE FRUIT JUICE INC 
By XI'AN, China, March 31, 2014 /PRNewswire/ -- SkyPeople Fruit Juice, Inc. (NASDAQ: 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 fiscal year ended December 31, 2013.
Full Year 2013 Summary:
-- Total revenue was $79.0 million, a decrease of 23% year-over-year
-- Gross profit was $27.6 million, a decrease of 17% year-over-year
-- Gross profit margin was 35% as compared to 32% year-over-year
-- Net income attributable to SkyPeople Fruit Juice, Inc. decreased 33%
year-over-year to $12.2 million
-- Revenue from the fruit juice beverage segment was $39.5 million, an
increase of 46% year-over-year
-- Cash, cash equivalents and restricted cash were $74.1 million as of
December 31, 2013
"We recorded less than expected financial results for fiscal year 2013 as several of our operating segments were hampered by a limited supply of fresh fruit for most of the year," said Mr. Hongke Xue, Chief Executive Officer of SkyPeople. "Although our first quarter's performance showed promise, a difficult squeezing season for several of our raw material fruit products, particularly apples, reduced the production of our core products for the remainder of the year.
"On the bright side, our fruit juice beverages segment had a record year as our investment in bottling infrastructure and an expanded sales and marketing team is generating solid returns. Our fruit juice beverages products are sold via over 100 distributors in more than 20,000 retail stores in approximately 30 provinces in China.
"We are also making substantial progress with our new project growth initiatives intended to develop a more secure supply chain so that we might have greater control of our raw materials. We believe that our projects to produce kiwis in Mei County and oranges in Yidu, Hubei Province will give us a competitive advantage and generate substantial returns for our shareholders. A deeper product platform will enable us to further diversify our product mix, reduce the volatility of supply and generate stable cash flow.
"We continue to see China as a tremendous growth market as higher incomes, urbanization and changing demographics will lead to healthier lifestyles and improved nutrition. Our outlook for 2014 is positive as we are optimistic that our diversified product line will see a turnaround from the difficult squeezing seasons experienced in 2013, our branded fruit juice beverages business will gain further traction and our new projects will continue to make important progress," CEO Hongke Xue concluded.
Full Year 2013 Financial Results
Revenue for the twelve months ended December 31, 2013 was $79.0 million, a decrease of 23%, as compared to $102.4 million for 2012. This decrease was primarily due to a decrease in the sales of concentrated apple juice, concentrated pear juice, fresh fruits and vegetables and other products, which was partially offset by an increase in sales of fruit juice beverages and concentrated kiwi juice and kiwi puree. During 2013, due to unexpected weather conditions, the amount of apple output in northeast China was lower than usual, which in turn resulted in higher raw material costs for apples. Therefore, the Company's Yingkou factory did not produce concentrated apple juice during the year which is a major reason for the decrease in revenue. The fruit juice beverages segment comprised 50% of total revenue for fiscal 2013 as compared to 27% for fiscal 2012 and was a large factor in mitigating the effects of reduced revenue contributions from most of the Company's other product segments for the year.
Fiscal Year Revenue by Segment (in thousands)
(In $000's, except %'s) Years ended December 31,
------------------------
2013 2012 % of change
---- ----
Concentrated apple juice and apple aroma 7,531 22,887 (67)%
Concentrated kiwifruit juice and kiwi puree 9,808 9,152 7%
Concentrated pear juice 20,396 28,925 (29)%
Fruit juice beverages 39,548 27,137 46%
Fresh fruits and vegetables 814 8,417 (90)%
Other 889 5,838 (85)%
--- -----
Total 78,986 102,356 (23)%
====== =======
Gross profit was $27.6 million in fiscal 2013, a decrease of 17% from $33.1 million in fiscal 2012. The gross profit margin was 35% in 2013 as compared to 32% for 2012. The year-over-year increase in gross margin was primarily attributable due to the fruit beverage segment, which comprised 53% of the Company's total gross profit for fiscal year 2013, as compared to 28% in fiscal 2012, and a higher relative contribution from the concentrated kiwifruit juice and kiwifruit puree segment which had a 44% gross margin in fiscal 2013.
(In $000's, except %'s) 2013 2012
---- ----
Gross profit Gross margin Gross profit Gross margin
------------ ------------ ------------ ------------
Concentrated apple juice and apple aroma 1,535 20% 4,640 20%
Concentrated kiwifruit juice and kiwi puree 4,313 44% 4,535 50%
Concentrated pear juice 6,500 32% 8,507 29%
Fruit juice beverages 14,646 37% 9,288 34%
Fresh fruits and vegetables 395 49% 4,663 55%
Other 164 18% 1,440 25%
--- -----
Total 27,553 35% 33,073 32%
====== === ====== ===
Operating expenses for fiscal 2013 increased by 19% to $9.4 million, or 12% of sales, compared to $7.9 million, or 8% of sales for fiscal 2012. General and administrative expenses increased 20% to $5.3 million in fiscal 2013 from $4.4 million for fiscal 2012, and includes legal fees related to litigation, payroll and directors' and officers' insurance premiums. The increase in general and administration expenses were mainly due to depreciation for property, plant and equipment attributable to the Company's Yingkou factory that had not been used during 2013 of approximately $0.8 million. Selling expenses increased 41% to $4.1 million in fiscal 2013 from $2.9 million in fiscal 2012, which was mainly due to an increase in the payroll and related expenses as a result of an increase in the Company's headcount to handle the increased sales of fruit juice beverages.
During the fiscal years 2013 and 2012, the Company incurred approximately $0.02 million and $0.6 million in research and development expenses, respectively. In 2013, the Company suspended four research and development agreements with research institutions and currently intends to concentrate on building up an internal research and development team.
Income from operations for fiscal 2013 was $18.2 million, a decrease of 28% from $25.2 million for fiscal 2012. Net income attributable to SkyPeople Fruit Juice shareholders for the fiscal year 2013 was $12.2 million, a decrease of 33% from $18.2 million in fiscal 2012, while diluted earnings per share was $0.46 for fiscal year 2013 as compared to $0.68 for fiscal year 2012.
Financial Condition
As of December 31, 2013, the Company had $74.1 million in cash, cash equivalents and restricted cash, reduced from $77.6 million as of fiscal year end 2012. The Company's restricted cash of $7.2 million consists of cash equivalents used as collateral to secure short-term notes payable. The Company's working capital was $71.9 million. As of December 31, 2013, the Company had total liabilities of $51.2 million, which included $8.0 million in long-term loans from a related party and $22.6 million in short-term bank loans. Stockholders' equity attributable to SkyPeople Fruit Juice was $173.5 million as of fiscal year end 2013 as compared to $156.5 million as of fiscal year end 2012.
During 2013, the Company's operating activities generated a net cash inflow of $24.9 million, an increase of 26% as compared to $19.7 million in 2012. Net cash used in investing activities were $60.0 million for fiscal 2013 versus $8.8 million in fiscal 2012. Cash flow generated from financing activities totaled $22.0 million in fiscal 2013 versus $5.3 million in fiscal 2012. Historically, the Company has financed its capital expenditures and other operating expenses through operating cash flows and bank loans.
Project Updates
On July 15, 2011, SkyPeople entered into a Letter of Intent with the People's Government of Suizhong County, Liaoning Province, to establish a fruit and vegetable industry chain and processing zone in Suizhong County, Liaoning Province. The Suizhong project may include the construction and operation of fruit juice production lines, a vegetable and fruit flash freeze facility, a refrigeration storage facility and warehouse, a world-class food safety testing center, fruit and vegetable finished products processing center among other facilities. The implementation of the project is subject to government approval of the project.
During 2013, the Company finished the feasibility study of the project and submitted a detailed project proposal to the local government. Both parties decided to continue with the project. The Company paid RMB 78 million (approximately $13 million) as partial payment to acquire the land use right from the local government, purchase equipment and build facilities.
On October 29, 2012, SkyPeople (China) entered into an investment/service agreement with the Yidu Municipal People's Government in Hubei Province of China. The total amount of RMB 300 million (approximately $48 million) will be mainly used to establish an orange processing and distribution center on the project land of 280 mu (approximately 46 acres). The consideration for transferring the land use right for the project land will be RMB 0.3 million (approximately $0.05 million) per mu.
During 2013, the Company made partial payment of RMB 77 million (approximately $12.4 million) as consideration to acquire the land use right. Yidu Municipal People's Government is in the process of demolition buildings on project land. The Company is actively working with various bodies of the Yidu Municipal People's Government to make preparations for the start of the project.
On April 3, 2013, SkyPeople (China) announced an agreement to manufacture and market kiwi products, entering 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 Center. The total planned area for the project is 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 (approximately $0.05 million) per mu for the land use rights.
During 2013, the Company made partial payment of RMB 200 million (approximately $32 million) as consideration to acquire the land use right, purchase equipment and build facilities. The Company is actively working with the Committee to prepare for the start of the project.
Conference Call
The Company will hold a conference call on Wednesday, April 2, 2014 at 9:00 a.m. Eastern Time to discuss its financial results for the fourth quarter and fiscal year ended December 31, 2013.
The Company's Chairman, Mr. Yongke Xue, and CFO, 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.
Date: Wednesday, April 2, 2014
Time: 9:00 a.m. Eastern Time, US
Conference Line Dial-In: +1-877-407-8033
International Dial-In: +1-201-689-8033
To access the replay, please dial 1-877-660-6853 within the United States or 1-201-612-7415 when dialing internationally. The passcode for the replay is 13579369 and it will be available on April 2, 2014 at 12:00 pm through April 9, 2014.
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, 2013 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.
-Financial Tables Follow-
SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED BALANCE SHEETS
December 31,
------------
2013 2012
---- ----
ASSETS
CURRENT ASSETS
Cash and cash equivalents $66,888,954 $77,560,278
Restricted cash 7,216,782 -
Accounts receivables, net of 34,179,426 49,435,961
allowance of $211,039 and
$46,643 as of December 31,
2013 and December 31, 2012,
respectively
Other receivables 575,040 201,417
Inventories 4,381,900 7,278,191
Deferred tax assets 535,713 90,576
Advances to suppliers and other 1,298,201 71,536
current assets
TOTAL CURRENT ASSETS 115,076,016 134,637,959
=========== ===========
PROPERTY, PLANT AND EQUIPMENT, NET 61,907,175 52,294,255
LAND USE RIGHT, NET 6,522,152 6,508,149
OTHER ASSETS 49,614,200 1,778,648
TOTAL ASSETS $233,119,543 $195,219,011
============ ============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $3,572,968 $14,399,282
Accrued expenses and other 4,008,715 2,050,675
payables
Income tax payable 1,749,138 3,127,245
Advances from customers 355,968 530,437
Notes payable -bank 10,825,173 -
Short-term loan - related party 24,970 -
Short-term bank loans 22,626,679 11,661,761
---------- ----------
TOTAL CURRENT LIABILITIES 43,163,611 31,769,400
---------- ----------
NON-CURRENT LIABILITIES
Long-term loan - related party 8,000,000 -
TOTAL NON-CURRENT LIABILITIES 8,000,000 -
--------- ---
TOTAL LIABILITIES 51,163,611 31,769,400
---------- ----------
STOCKHOLDER' EQUITY
SkyPeople Fruit Juice, Inc, Stockholders' equity
Series B Preferred stock, $0.001 par
value; 10,000,000 shares authorized;
None issued and outstanding as of - -
December 31, 2013 and December
31, 2012, respectively
Common stock, $0.001 par value; 26,661 26,661
66,666,666 shares authorized;
26,661,499 shares issued and
outstanding as of December 31, 2013
and 2012, respectively
Additional paid-in capital 59,189,860 59,189,860
Retained earnings 94,962,299 82,793,585
Accumulated other comprehensive 19,354,599 14,500,860
income
Total SkyPeople Fruit Juice, Inc. 173,533,419 156,510,966
stockholders' equity
Non-controlling interests 8,422,513 6,938,645
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 181,955,932 163,449,611
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $233,119,543 $195,219,011
============ ============
The accompanying notes in the Company's 10-K are an integral part of these consolidated financial statements.
SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME
For the years Ended December 31,
--------------------------------
2013 2012
---- ----
Revenue $78,986,296 $102,356,001
Cost of goods sold 51,433,323 69,283,010
---------- ----------
Gross profit 27,552,973 33,072,991
Operating Expenses
General and administrative expenses 5,296,910 4,409,055
Selling expenses 4,058,784 2,899,141
Research and development expenses 20,183 570,278
------ -------
Total operating expenses 9,375,877 7,878,474
Income from operations 18,177,096 25,194,517
Other income (expenses)
Interest income 319,623 314,628
Subsidy income 1,295,949 1,908,802
Interest expenses (1,983,831) (888,574)
Settlement relating to prior acquisition - (475,248)
Total other income (expenses) (368,259) 859,608
Income before income tax 17,808,837 26,054,125
Income tax provision 4,639,259 6,871,238
--------- ---------
Net income 13,169,578 19,182,887
Less: Net income attributable to 1,000,864 1,012,755
non-controlling interests
Net income attributable to SkyPeople Fruit Juice, Inc. 12,168,714 18,170,132
Other comprehensive income
Foreign currency translation adjustment 5,336,743 437,329
--------- -------
Comprehensive income 17,505,457 18,607,461
Other comprehensive income attributable to non-controlling interests 483,004 23,089
COMPREHENSIVE INCOME ATTRIBUTABLE TO SKYPEOPLE FRUIT JUICE, INC. $17,022,453 $18,584,372
=========== ===========
Earnings per share:
Basic earnings per share $0.46 $0.68
Diluted earnings per share $0.46 $0.68
Weighted average number of shares outstanding
Basic 26,661,499 26,107,264
Diluted 26,661,499 26,661,499
The accompanying notes in the Company's 10-K are an integral part of these consolidated financial statements.
SKYPEOPLE FRUIT JUICE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the years ended December 31,
--------------------------------
2013 2012
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $13,169,578 $19,182,887
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 5,169,597 4,596,276
Deferred income tax assets (445,137) 83,709
Bad debt provision 160,418 -
Inventory markdown 243,198 -
Changes in operating assets and liabilities
Accounts receivable 16,203,666 (13,290,808)
Other receivable (361,983) (8,900)
Advances to suppliers and other (1,205,789) (4,861)
current assets
Inventories 2,829,649 (1,131,943)
Accounts payable (11,096,289) 11,370,240
Accrued expenses 1,880,263 (2,648,963)
Income tax payable (1,451,888) 1,206,559
Advances from customers (187,907) 349,640
-------- -------
Net cash provided by operating activities 24,907,376 19,703,836
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and (12,616,030) (7,034,822)
equipment
Additions to land use right (36,733,518) (1,205,038)
Prepayment for other assets (10,659,136) (511,172)
----------- --------
Net cash used in investing activities (60,008,684) (8,751,032)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Increased in restricted (7,104,451) 315,814
cash
Short-term notes payable 10,656,677 (284,131)
Proceeds from related party loan 8,024,970 -
Proceeds from short-term bank loans 17,178,140 6,336,634
Repayment of short-term bank loans (6,739,021) (1,138,658)
---------- ----------
Net cash provided by (used in) financing activities 22,016,315 5,229,659
---------- ---------
Effect of change in exchange rate 2,413,669 223,808
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (10,671,324) 16,406,271
Cash and cash equivalents, 77,560,278 61,154,007
beginning of year
Cash and cash equivalents, end of $66,888,954 $77,560,278
year
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest $1,239,500 $888,574
Cash paid for income taxes $6,536,283 $5,556,241
SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION
Transferred from other assets to $355,836 $5,221,925
property, plant and equipment and
construction in process
The accompanying notes in the Company's 10-K are an integral part of these consolidated financial statements.
For more information, please contact:
COMPANY INVESTOR RELATIONS
Xin Ma, Chief Financial Officer David Rudnick, Account Manager
SkyPeople Fruit Juice, Inc. Precept Investor Relations
Tel: China + 86 - 29-8837-7161 Tel: US +1 917-864-8849
Email: oliver.x.ma@skypeoplefruitjuice.com Email: david.rudnick@preceptir.com
Web: http://www.skypeoplefruitjuice.comSOURCE SkyPeople Fruit Juice, Inc.
