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SkyPeople Fruit Juice, Inc. : SkyPeople Fruit Juice Reports First Quarter 2012 Financial Results

05/14/2012 | 08:05am US/Eastern

XI'AN , China, May 14, 2012 /PRNewswire-Asia-FirstCall/ -- SkyPeople Fruit Juice, Inc. (NASDAQ: SPU) ("SkyPeople" or "the Company"), a producer of fruit juice concentrates, fruit beverages and other fruit-related products, today announced its financial results for the three months ended March 31, 2012.

First Quarter 2012 Summary:

    --  Total revenue was $15.0 million, a decrease of 23% year-over-year
    --  Sales revenue of concentrated kiwi juice and kiwi puree increased 26% to
        $3.8 million
    --  Sales revenue of concentrated pear juice increased 19% to $4.8 million
    --  Cash generated from operations was $14.8 million
    --  Cash and cash equivalents were $76.7 million as of March 31, 2012

Yongke Xue, Chief Executive Officer of SkyPeople, commented, "We continue to be challenged by unpredictable market conditions and rising raw material costs due to the volatile pricing of fresh fruits. We understand that these factors are beyond our control, and have been working to further diversify our segment mix to offset, to the extent possible, the effect of seasonality. Nonetheless, we were able to generate healthy margins in two key product lines. We are also pleased to report solid cash flows generated from operating activities, further strengthening our cash position which enables us to execute our comprehensive growth strategy."

"During the quarter we achieved the following important developments which I would like to highlight. First of all, our cash balances had been independently verified, which substantiated our integrity and reassured investors as to our credibility. Secondly, we had commenced operation of a new fruit juice beverage production line in our Huludao Wonder subsidiary, which was expected to help us take advantage of economies of scale and focus on producing high margin fruit juice beverages. Thirdly, we appointed Mr. Xin Ma as our new Chief Financial Officer with confidence that his experience with U.S. publicly traded Chinese companies is an excellent fit to our needs. These developments reflected our management's commitment to focus on enhanced financial transparency, sound investor communications and an operational focus on high margin products. Our top priority continues to be generating solid returns on our investment so as to create long-term value for our shareholders," CEO Xue stated.

First Quarter 2012 Financial Results

Revenue for the three months ended March 31, 2012 was $15.0 million, a decrease of 23%, as compared to $19.4 million in the same period in 2011. This decrease was primarily due to a decrease in the sales of concentrated apple juice and apple aroma, fruit juice beverages as well as fresh fruits and vegetables, as partially offset by an increase in the sales of concentrated kiwifruit juice and kiwifruit puree and concentrated pear juice.

    First Quarter 2012 Revenue by Segment (in thousands)
                                                            2012    2011 % of change
                                                            ----    ---- -----------
    Concentrated apple juice and apple aroma              $2,508  $3,673             (32%)
    Concentrated kiwifruit juice and kiwifruit puree       3,761   2,985               26%
    Concentrated pear juice                                4,767   4,022               19%
    Fruit juice beverages                                  3,370   7,277             (54%)
    Fresh fruits and vegetables                              588   1,458             (60%)
                                                             ---   -----             ----
    Total                                                $14,994 $19,415             (23%)
                                                         ======= =======             ====

Gross profit was $4.8 million, as compared to $8.6 million in the first quarter of 2011. Gross profit margin was 32% as compared to 44% in the same period of 2011. The year-over-year decline in gross margin was attributable to a decline in gross margins in four of the Company's five primary product segments.

Operating expenses for the first quarter of 2012 were $2.1 million, or 15% of sales, compared to $1.4 million, or 7% of sales in the same period of 2011. General and administrative expenses increased by 81% to $1.5 million, mainly due to an increase in legal fees related to the Company's current pending litigations, payroll and related expenses as a result of an increase in employees to handle the increased general and administrative work. Selling expenses increased by 16% to $0.5 million, mainly due to an increase in payroll and related expenses as a result of an increased headcounts to handle the greater sales effort.

Income from operations for the first quarter of 2012 dropped 63% to $2.6 million as compared to $7.2 million for the same period of 2011.

Net income attributable to common shareholders and earnings per share for the first quarter of 2012 were $1.9 million and $0.07, respectively, compared to $5.3 million and $0.20, respectively, in the first quarter of 2011.

Conference Call

The Company will hold a conference call on Tuesday, May 15, 2012, at 9:00 a.m. Eastern Time to discuss its financial results for the first quarter ended March 31, 2012.

The Company's CEO, Mr. Yongke Xue, and the 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. When prompted by the operator, mention the conference Pass Code.

    Date:                           Tuesday, May 15, 2012
    Time:                           9:00 a.m. Eastern Time, US
    Conference Line Dial-In:        +1-866-394-2209
    International Dial-In:          +1-706-758-1481
    Conference Pass Code:                             79908497

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 79908497 for the replay. The replay will be available on May 15th 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, holds 99.78% ownership interest in SkyPeople Juice Group Co., Ltd. ("SkyPeople (China)"). SkyPeople (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, 2011 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

    Xin Ma, CFO
    SkyPeople Fruit Juice, Inc.
    Tel:   China + 86 - 29-8837-7161
    Email: oliver.x.ma@skypeoplefruitjuice.com
    Web: http://www.skypeoplefruitjuice.com

- Financial Tables Follow -

                                                         SKYPEOPLE FRUIT JUICE, INC.
                                                         CONSOLIDATED BALANCE SHEETS


                                                 March 31,                                   December 31,
                                                 ---------                                   ------------
                                                       2012                                           2011
                                                       ----                                           ----
    ASSETS                                      (Unaudited)

    CURRENT ASSETS
        Cash and cash equivalents                                                $76,713,489                $61,154,007
        Restricted cash                                                               31,775                    316,396
        Accounts receivables, net of
         allowance of $46,577                                                     21,782,597                 35,999,858
            and $46,529 as of March 31, 2012
             and December 31, 2011,
             respectively
        Other receivables                                                            190,210                    192,032
        Inventories                                                                5,335,964                  6,126,376
        Deferred tax assets                                                          113,770                    174,285
        Advances to suppliers and other current
         assets                                                                      175,832                     66,528
                                                                                     -------                     ------
    TOTAL CURRENT ASSETS                                                         104,343,637                104,029,482
                                                                                 ===========                ===========

    PROPERTY, PLANT AND EQUIPMENT, NET                                            49,784,454                 44,277,228
    LAND USE RIGHT, NET                                                            6,635,133                  6,673,496
    OTHER ASSETS                                                                     173,233                  5,323,162
    TOTAL ASSETS                                                                $160,936,457               $160,303,368
                                                                                ============               ============


    LIABILITIES

    CURRENT LIABILITIES
        Accounts payable                                                          $2,099,190                 $2,972,916
        Accrued expenses                                                           3,468,696                  4,701,054
        Income tax payable                                                           855,217                  1,910,779
        Advances from customers                                                            -                    178,857
        Short-term bank loans                                                      8,467,979                  6,425,713
        Short-term notes payable                                                           -                    284,654
                                                                                         ---                    -------
    TOTAL CURRENT LIABILITIES                                                     14,891,082                 16,473,973
                                                                                  ----------                 ----------

    SHAREHOLDERS' EQUITY

    SkyPeople Fruit Juice, Inc,
     Stockholders' equity
        Series B Preferred stock, $0.001
         par value;                                                                    1,457                      1,457
            10,000,000 shares authorized;
             1,456,647
            issued and outstanding as of March
             31,
            2012 and December 31, 2011
        Common stock, $0.001 par value;
         66,666,666                                                                   25,690                     25,690
            shares authorized; 25,690,402
             shares
            issued and outstanding as of March
             31,
            2012 and  December 31, 2011
        Additional paid-in capital                                                59,189,374                 59,189,374
        Retained earnings                                                         66,542,611                 64,623,453
        Accumulated other comprehensive
         income                                                                   14,236,710                 14,086,620
                                                                                  ----------                 ----------
        Total SkyPeople Fruit Juice, Inc.
         stockholders'                                                           139,995,842                137,926,594
            equity
        Non-controlling interests                                                  6,049,533                  5,902,801
                                                                                   ---------                  ---------
    TOTAL EQUITY                                                                 146,045,375                143,829,395
    TOTAL LIABILITIES AND EQUITY                                                $160,936,457               $160,303,368
                                                                                ============               ============



                                                                    SKYPEOPLE FRUIT JUICE, INC.
                                                    CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
                                                                            (Unaudited)

                                                  For the Three month Ended March 31,
                                                  -----------------------------------
                                                                                 2012                                  2011
                                                                                 ----                                  ----
    Revenue                                                                                               $14,993,500       $19,414,915
    Cost of goods sold                                                                                     10,207,501        10,809,357
                                                                                                           ----------        ----------
    Gross profit                                                                                            4,785,999         8,605,558

    Operating Expenses
        General and administrative expenses                                                                 1,477,604           816,160
        Selling expenses                                                                                      525,334           454,674
        Research and development expenses                                                                     142,685           136,467
                                                                                                              -------           -------
    Total operating expenses                                                                                2,145,623         1,407,301

    Income from operations                                                                                  2,640,376         7,198,257

    Other income (expenses)
        Interest income                                                                                        69,689            76,312
        Subsidy income                                                                                        433,504           483,067
        Interest expenses                                                                                    (154,812)         (163,795)
        Others                                                                                                   (968)           (3,033)
                                                                                                                 ----            ------
    Total other income (expenses)                                                                             347,413           392,551

    Income before income tax                                                                                2,987,789         7,590,808
        Income tax provision                                                                                  928,380         1,929,808
                                                                                                              -------         ---------
    Net income                                                                                              2,059,409         5,661,000

    Less: Net income attributable to
     non-controlling interests                                                                                140,251           368,824
                                                                                                              -------           -------

    NET INCOME ATTRIBUTABLE TO SKYPEOPLE
     FRUIT JUICE, INC.                                                                                     $1,919,158        $5,292,176
                                                                                                           ==========        ==========

    Earnings per share:
        Basic earnings per share                                                                                $0.07             $0.20
        Diluted earnings per share                                                                              $0.07             $0.20

    Weighted average number of shares outstanding
        Basic                                                                                              25,690,402        25,690,402
        Diluted                                                                                            26,661,500        26,662,599

    Comprehensive Income
    Net income                                                                                             $2,059,409        $5,661,000
    Foreign currency translation
     adjustment                                                                                               156,571         1,141,578
                                                                                                              -------         ---------
    Total Comprehensive income                                                                             $2,215,980        $6,802,578
    Comprehensive income attributable to
     non-controlling interests                                                                                146,732           413,802
    Comprehensive income attributable to
     SkyPeople Fruit Juice, Inc.                                                                           $2,069,248        $6,388,776
                                                                                                           ==========        ==========



                                                              SKYPEOPLE FRUIT JUICE, INC.
                                                         CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                      (Unaudited)

                                             For the Three month Ended March 31,
                                                                            2012                            2011
    CASH FLOWS FROM OPERATING ACTIVITIES
    Net income                                                                                  $2,059,409        $5,661,000
    Adjustments to reconcile net income to
     net cash provided by operating
     activities
        Depreciation and amortization                                                              706,064           865,108
        Deferred income tax assets                                                                  60,515                 -
    Changes in operating assets and
     liabilities
        Accounts receivable                                                                     14,225,403        10,143,930
        Other receivable                                                                             2,009          (108,542)
        Advances to suppliers and other
         current assets                                                                           (109,276)          (28,135)
        Inventories                                                                              1,163,961          (837,263)
        Accounts payable                                                                          (875,022)        2,457,839
        Accrued expenses                                                                        (1,233,484)       (1,699,172)
        Income tax payable                                                                      (1,055,393)       (2,451,649)
        Advances from customers                                                                   (178,673)         (394,573)
    Net cash provided by operating
     activities                                                                                 14,765,513        13,608,543

    CASH FLOWS FROM INVESTING ACTIVITIES
        Additions to property, plant and
         equipment                                                                              (1,320,608)          (60,901)
        Prepayment for other assets                                                                (13,621)         (225,513)
    Net cash used in investing activities                                                       (1,334,229)         (286,414)

    CASH FLOWS FROM FINANCING ACTIVITIES
        Decreased in restricted cash                                                               284,361           103,574
        Short-term notes payable                                                                  (284,361)         (103,574)
        Proceeds from short-term bank loans                                                      3,170,879         2,486,808
        Repayment of short-term bank loans                                                      (1,139,578)                -
    Net cash provided by financing
     activities                                                                                  2,031,301         2,486,808

    Effect of change in exchange rate                                                               96,897           560,614

    NET INCREASE IN CASH AND CASH
     EQUIVALENTS                                                                                15,559,482        16,369,551
        Cash and cash equivalents, beginning
         of period                                                                              61,154,007        49,350,385
        Cash and cash equivalents, end of
         period                                                                                $76,713,489       $65,719,936

    SUPPLEMENTAL DISCLOSURES OF CASH FLOW
     INFORMATION
        Cash paid for interest                                                                    $154,812          $163,795
        Cash paid for income taxes                                                              $1,923,258        $4,381,457

    SUPPLEMENTARY DISCLOSURE OF
     SIGNIFICANT NON-CASH TRANSACTION
        Transferred from other assets to
         property, plant                                                                        $5,158,425          $445,487
        and equipment and construction in
         process

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

SOURCE SkyPeople Fruit Juice, Inc.

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