SKYPEOPLE FRUIT JUICE INC XI'AN , China, Aug. 14, 2014 /PRNewswire/ -- SkyPeople Fruit Juice, Inc. (NASDAQ: SPU - News) ("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 second quarter ended June 30, 2014.
Second Quarter 2014 Summary:
-- Revenue was $12.0 million, an increase of 16% year-over-year
-- Gross profit was $4.6 million, an increase of 37% year-over-year
-- Gross profit margin was 38% as compared to 32% for the same period of
2013
-- Income from operations was $2.2 million, an increase of 131%
year-over-year
-- Net income was $0.2 million as compared to $0.8 million for the same
period of 2013
-- Cash and cash equivalents were $79.7 million as of June 30, 2014
"We are pleased to report a 16% increase in our top-line results in the second quarter of 2014 from the year-ago quarter. Our fruit juice beverage segment grew 28% as compared to the second quarter a year ago which offset the limited revenue contributions from our other product segments due to the scarcity of raw materials and finished products in inventory," said Mr. Hongke Xue, Chief Executive Officer of SkyPeople. "Although our revenue compared positively to that of the year-ago quarter, a capital lease obligation undertaken early this year for our major project initiatives impeded our bottom line results for the quarter.
"We view our branded fruit juice beverages as a key growth segment that fits China's growth profile very well. We currently sell our fruit juice beverages to more than 20,000 retail stores in approximately 20 provinces and see the potential for further geographical expansion throughout China. In particular, we plan to expand our glass bottle production line to target consumers in more populated Chinese cities. We also look forward to a new growing season that could provide ample raw materials required for processing so as to better balance our product segment contributions to revenue.
"We continue to make progress with our new projects that are intended to provide us with a more secure supply chain so that we will have greater control of our raw materials. Our project to develop a manufacturing base for kiwi products in Mei County is on schedule and we anticipate beginning trial production runs in the second half of this year. This project, in addition to our orange development project in Hubei Province, should enable us to further diversify our product mix and reduce volatility that can occur with our supply chain.
"We view China's urbanization trend to be especially important as it will enable us to further drive sales of our nutritious fruit juice beverages and leverage upon the growing need for healthy urban lifestyles. Given the relatively low consumption rate of fruit juice beverages in China, we believe that the growth of healthy beverages is a long-term trend that will benefit from urbanization, growing incomes and changing demographics," Mr. Hongke Xue concluded.
Second Quarter 2014 Financial Results
Revenue. Revenue for the three months ended June 30, 2014 was $12.0 million, an increase of 16% as compared to $10.4 million for the same period of 2013. This increase was primarily due to a rise in sales in the Company's fruit juice beverages segment. The fruit juice beverage segment constituted 92% of total Company revenue for the second quarter of 2014 as compared to 83% for the same period of 2013. This offset a decline in all of the other of the Company's core product segments.
Second Quarter 2014 Revenue by Product Segment
(in $000's except %) Three Months ended June
30,
------------------------
2014 2013 % of change
---- ---- -----------
Concentrated apple juice and apple aroma 773 1,052 (27%)
Concentrated kiwifruit juice and kiwi puree 5 10 (50%)
Concentrated pear juice 190 684 (72%)
Fruit juice beverages 10,991 8,594 28%
Fresh fruits and vegetables - 4 (100%)
Other 20 6 233%
--- --- ---
Total 11,979 10,350 16%
----- ------ ------ ---
Revenue by Segment. Sales from apple related products were $0.8 million for the three months ended June 30, 2013, a decrease from sales of $1.1 million for the same period of 2013. During the second quarter of 2014, the Company sold approximately 480 tons of concentrated apple juice, a decrease from the approximately 615 tons of concentrated apple juice sold in the same period of 2013. The decrease of revenue generated from concentrated apple juice was mainly caused by the decrease of unit price and amounts sold.
Sales from concentrated kiwifruit juice and kiwifruit puree were $0.005 million for the second quarter of 2014, a decrease from sales $0.01 million for the same period of 2013 primarily due to a decrease in both the amount sold and unit price. During the three months ended June 30, 2014, the Company sold approximately 2.7 tons of kiwi-related products.
Sales of concentrated pear juice were $0.2 million in the second quarter of 2014, a decrease from sales of $0.7 million in the same period of 2013. During the second quarter of 2014, the Company sold 100 tons of concentrated pear juice as compared to 527 tons of concentrated pear juice sold in the same period of 2013. The decrease in revenue was mainly due to the reduced amount of concentrated pear juice sold.
Revenue from fruit juice beverages were $11.0 million in the second quarter of 2014, an increase from sales of $8.6 million for the same period of 2013. The increase in revenue is primarily due to bigger market share gained from our continuous efforts of expanding sales channel.
Revenue from our fresh fruits and vegetables were $0.004 million in the second quarter of 2013 and nil for the same period of 2014.
Revenue from other products were $0.02 million in the second quarter of 2014, an increase from sales of $0.006 million for the same period of 2013. The amount of sales of other products is expected to be unstable and is generally not indicative of our future sales of other products.
Second Quarter 2014 Gross Profit by Product Segment
Gross profit was $4.6 million in the second quarter of 2014, an increase of 37% from $3.4 million for the same period in 2013. The Company's total gross profit margin was 38% in the second quarter of 2014 as compared to 32% for the same period of 2013, primarily due to an increase in the gross profit margin of the fruit beverages segment to 39% in the second quarter of 2014 as compared to 37% for the same period of 2013.
(In $000's except %) Three months ended June 30,
---------------------------
2014 2013
---- ----
Gross Gross Gross Gross
profit margin profit margin
------ ------ ------ ------
Concentrated apple juice and apple aroma 153 20% 77 7%
Concentrated kiwifruit juice and kiwi puree 1 20% 5 50%
Concentrated pear juice 90 47% 121 18%
Fruit juice beverages 4,302 39% 3,147 37%
Fresh fruits and vegetables - - 3 75%
Other 8 40 1 17%
--- --- --- ---
Total 4,554 38% 3,354 32%
----- ----- --- ----- ---
Operating Expenses. Operating expenses for the second quarter of 2014 was $2.4 million, or 20% of sales, as compared to $2.4 million, or 23% of sales for the same period of 2013. General and administrative expenses decreased 22% to $1.0 million in the second quarter of 2014 as compared to $1.3 million for the same period of 2013, mainly due to the continued decrease in legal fees related to currently pending litigation. Selling expenses increased 14% in the second quarter of 2014 to $1.4 million as compared to $1.2 million for the same period of 2013, mainly due to an increase in headcount to handle the increased sales work.
Income from Operations. Income from operations was $2.2 million for the second quarter of 2014, an increase of 131% as compared to $0.9 million for the same period of 2013.
Net Income and Earnings Per Share. Net income for the second quarter of 2014 was $0.2 million as compared to $0.8 million for the same period of 2013, mainly due to an increase in interest expense attributable to a capital lease. Earnings per share attributable to SkyPeople Fruit Juice for the second quarter of 2014 was nil as compared to $0.03 for the same period of 2013.
Six Months 2014 Financial Results
Revenue for the six months ended June 30, 2014 was $23.8 million, a decrease of 18% as compared to $29.0 million for the same period of 2013. Gross profit was $8.3 million, a decrease of 25% as compared to $11.0 million for the same period of 2013. Gross margin for the six months ended June 30, 2014 was 35% compared to 38% in the same period of 2013. Operating expenses for the first six months of 2014 were $4.4 million, or 19% of sales, as compared to $4.6 million, or 16% of sales for the same period of 2013. General and administrative expenses were $2.2 million a decrease of 15% as compared to $2.6 million for the same period of 2013. Income from operations for the six months ended June 30, 2014 was $3.8 million, a decrease of 41% as compared to $6.4 million for the same period of 2013. Net income attributable to SkyPeople Fruit Juice for the first six months ended June 30, 2014 was $0.6 million as compared to $4.5 million for the same period of 2013.
Second Quarter 2014 Financial Condition
As of June 30, 2014, the Company had $99.8 million in cash, cash equivalents and restricted cash, up from $74.1 million as of fiscal year end 2013. The Company's restricted cash of $20.1 million consists of cash equivalents used as collateral to secure short-term notes payable. The Company's working capital was $60.8 million. As of June 30, 2014, the Company had total liabilities of $90.8 million which included $47.3 million in short-term bank loans and bank notes payable, an $8.0 million long-term loan to a related party and $21.0 million in capital lease obligations. As of June 30, 2014, shareholders' equity attributable to SkyPeople Fruit Juice was $172.5 million as compared to $173.5 million as of fiscal year end 2013.
Liquidity and Capital Resources
For the first half of 2014, the Company's operating activities generated a net cash inflow of $22.4 million as compared to $29.8 million for the same period of 2013. Net cash used in investing activities was $2.5 million for the quarter ended June 30, 2014 as compared to $38.5 million for the same period of 2013. For the first half 2014, cash flow used in financing activities totaled $6.4 million as compared to cash flow provided by financing activities of $10.1 million for the same period of 2013. Historically, the Company has financed its capital expenditures and other operating expenses through cash on hand, operating cash flow and bank loans.
Project Updates
The Company is developing a fruit and vegetable industry chain and processing zone in Suizhong County, Liaoning Province, China, pursuant to its Letter of Intent with the People's Government of Suizhong County. 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 and a fruit and vegetable finished products processing center, among other facilities. The estimated capital expenditure for the project is expected to be $4.6 million. During 2013, the Company finished the feasibility study of the project and submitted a detailed project proposal to the local government with the result that both parties decided to continue with the project. The Company has made partial payment to acquire the land use right from the local government purchase equipment and build facilities.
The Company is developing an orange processing and distribution center pursuant to its investment/service agreement with the Yidu Municipal People's Government in Hubei Province, China. Pursuant to the agreement, the Company will be responsible for an investment amount of approximately $48 million. The Yidu Municipal People's Government is in the process of demolition of buildings on the project land and the Company is actively working with various bodies of the local government to make preparations for the start of the project.
The Company is developing a kiwi processing and trading center pursuant to its 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, China. Pursuant to the agreement, the Company will be responsible for construction and financing with an investment amount of approximately $72 million. As an update, the Company is in the process of building facilities and purchasing equipment for the project, and it is expected that trial production has been delayed until the second half of 2014.
Conference Call
The Company will hold a conference call on Friday, August 15, 2014 at 9:00 am Eastern Time to discuss its financial results for the second quarter ended June 30, 2014. 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: Friday, August 15,
2014
Time: 9:00 am Eastern Time,
US
Conference Line Dial-In: +1-877-407-8031
International Dial-In: +1-201-689-8031
To access the replay, please dial 1-877-660-6853 within the United States or 1-201-612-7415 when dialing internationally. The pass code for the replay is 13582913 and it will be available from August 15, 2014 at 12:00 pm through August 22, 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
June 30, December 31,
2014 2013
---- ----
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $79,723,955 $66,888,954
Restricted cash 20,072,162 7,216,782
Accounts receivables, net of
allowance of $209,122 and $211,039
as of June 30, 2014 and December 31,
2013, respectively 17,795,059 34,179,426
Other receivables 921,484 575,040
Inventories 5,813,692 4,381,900
Deferred tax assets 1,480,690 535,713
Advances to suppliers and other
current assets 647,001 1,298,201
------- ---------
TOTAL CURRENT ASSETS 126,454,043 115,076,016
=========== ===========
PROPERTY, PLANT AND EQUIPMENT, NET 91,067,126 61,907,175
LAND USE RIGHT, NET 6,372,202 6,522,152
SECURITY DEPOSIT FOR CAPITAL LEASE 3,144,910 -
OTHER ASSETS 40,370,408 49,614,200
---------- ----------
TOTAL ASSETS $267,408,689 $233,119,543
============ ============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $5,337,527 $3,572,968
Accrued expenses 8,428,031 4,008,715
Income tax payable 557,068 1,749,138
Advances from customers 239,695 355,968
Notes payable -bank 24,947,991 10,825,173
Short-term loan - related party - 24,970
Short-term bank loans 22,314,406 22,626,679
Obligations under capital leases -
current 3,831,441 -
--------- ---
TOTAL CURRENT LIABILITIES 65,656,159 43,163,611
---------- ----------
NON-CURRENT LIABILITIES
Long-term loan - related party 8,000,000 8,000,000
Obligations under capital leases 17,134,623 -
---------- ---
TOTAL NON-CURRENT LIABILITIES 25,134,623 8,000,000
---------- ---------
TOTAL LIABILITIES 90,790,782 51,163,611
---------- ----------
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
June 30, 2014 and December 31, 2013,
respectively - -
Common stock, $0.001 par value;
66,666,666 shares authorized;
26,661,499 shares issued and
outstanding as of June 30, 2014 and
December 31, 2013, respectively 26,661 26,661
Additional paid-in capital 59,189,860 59,189,860
Retained earnings 95,514,839 94,962,299
Accumulated other comprehensive
income 17,742,916 19,354,599
---------- ----------
Total SkyPeople Fruit Juice, Inc.
stockholders' equity 172,474,276 173,533,419
Non-controlling interests 4,143,631 8,422,513
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 176,617,907 181,955,932
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY $267,408,689 $233,119,543
============ ============
The accompanying 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 For the
Three months Six months
Ended Ended
June 30, June 30,
-------- --------
2014 2013 2014 2013
---- ---- ---- ----
Revenue $11,978,652 $10,349,909 $23,761,819 $28,961,365
Cost of goods sold 7,424,302 6,995,919 15,536,234 17,966,477
--------- --------- ---------- ----------
Gross profit 4,554,350 3,353,990 8,225,585 10,994,888
Operating Expenses
General and administrative expenses 995,830 1,281,515 2,188,951 2,587,429
Selling expenses 1,384,991 1,212,921 2,249,489 1,954,087
Research and development expenses - (79,642) - 18,980
--- ------- --- ------
Total operating expenses 2,380,821 2,414,794 4,438,440 4,560,496
Income from operations 2,173,529 939,196 3,787,145 6,434,392
Other income (expenses)
Interest income 238,212 82,941 311,873 154,520
Subsidy income 37,374 435,839 470,971 786,813
Interest expenses (1,749,783) (351,033) (2,562,204) (628,056)
Consulting fee related to capital lease (439,908) - (882,700) -
-------- --- -------- ---
Total other income (expenses) (1,914,105) 167,747 (2,662,060) 313,277
Income before income tax 259,424 1,106,943 1,125,085 6,747,669
Income tax provision 102,608 322,754 331,210 1,806,619
------- ------- ------- ---------
Net income 156,816 784,189 793,875 4,941,050
Less: Net income attributable to non-controlling interests 107,948 104,147 241,335 442,860
------- ------- ------- -------
NET INCOME ATTRIBUTABLE TO SKYPEOPLE FRUIT JUICE, INC. $48,868 $680,042 552,540 4,498,190
------- -------- ------- ---------
Other comprehensive income (loss)
Foreign currency translation adjustment (11,592) 2,518,720 (1,717,080) 2,929,951
------- --------- ---------- ---------
Comprehensive income (loss) 37,276 3,198,762 (1,164,540) 7,428,141
Other comprehensive income (loss) attributable to non-controlling interests 48,959 227,957 (105,397) 265,176
------ ------- -------- -------
COMPREHENSIVE INCOME (LOSS) ATTRIBUTABLE TO SKYPEOPLE FRUIT JUICE,
INC. $(11,683) $2,970,805 (1,059,143) 7,162,965
======== ========== ========== =========
Earnings per share:
Basic earnings per share $ - $0.03 $0.02 $0.17
Diluted earnings per share $ - $0.03 $0.02 $0.17
Weighted average number of shares outstanding
Basic 26,661,499 26,661,499 26,661,499 26,661,499
Diluted 26,661,499 26,661,499 26,661,499 26,661,499
The accompanying 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
For the six months
ended June 30,
--------------
2014 2013
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $793,875 $4,941,050
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation and amortization 1,572,175 1,510,091
Deferred income tax assets (944,977) (149,215)
Changes in operating assets and liabilities
Accounts receivable 16,111,019 36,671,171
Other receivable (352,389) (470,281)
Advances to suppliers and other current assets 640,892 (10,174)
Inventories (438,715) 841,381
Accounts payable 1,801,177 (9,913,912)
Accrued expenses 4,461,534 (270,092)
Income tax payable (1,178,899) (2,919,124)
Advances from customers (113,301) (414,816)
-------- --------
Net cash provided by operating activities 22,352,391 29,816,079
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Refund of purchase deposit 7,506,207 -
Additions to property, plant and equipment (9,966,212) (485,142)
Prepayment for other assets (18,652) (38,000,669)
------- -----------
Net cash used in investing activities (2,478,657) (38,485,811)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid to non-controlling shareholder (4,414,820) -
Increase in restricted cash (12,950,836) -
Short-term notes payable 14,254,064 -
Proceeds from related party loan - 8,000,000
Proceeds from short-term bank loans 19,489,005 8,653,944
Repayment of short-term bank loans (19,595,955) (6,555,123)
Payment for security deposit of capital lease (3,152,185) -
Repayment of related party loans (24,970) -
------- ---
Net cash provided by (used in) financing activities (6,395,697) 10,098,821
---------- ----------
Effect of change in exchange rate (643,036) 1,323,994
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 12,835,001 2,753,083
Cash and cash equivalents, beginning of period 66,888,954 77,560,278
---------- ----------
Cash and cash equivalents, end of period $79,723,955 $80,313,361
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid for interest $2,159,600 $496,209
Cash paid for income taxes $2,455,086 $4,874,958
SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT NON-CASH TRANSACTION
Transferred from other assets to property, plant and equipment and $1,325,819 $317,258
construction in process
Properties acquired from capital lease 21,014,564 $ -
The accompanying notes in the Company's 10-Q 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.
