SKYPEOPLE FRUIT JUICE INC XI'AN, China, Nov. 16, 2015 /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 third quarter ended September 30, 2015.
Third Quarter 2015 Summary:
-- Total revenue was $10.6 million
-- Gross profit was $3.9 million
-- Gross profit margin was 37%
-- Income from operations was $1.5 million
-- Net loss was $0.4 million
-- Cash, cash equivalents and restricted cash were $63.2 million
"We recorded disappointing results in the third quarter of 2015 with lower sales in all of our fruit product segments due to a very limited supply of available fresh fruit due to unfavorable weather conditions, such as excessive rain, which led to a much shortened growing season. Further, our fruit juice beverage segment experienced intense competition via online discounting which disrupted our normal channels of distribution. The combination of these two factors caused our top line to contract significantly, resulting in a loss for the quarter," said Mr. Yongke Xue, Chief Executive Officer of SkyPeople.
"Our project to manufacture and market kiwi products in Mei County is a key initiative towards vertically integrating our capabilities and preventing the disruption of our operations caused by poor growing seasons and the scarcity of raw materials. While the construction of this facility to process kiwi fruit is mostly completed, we have encountered a delay in the completion of the waste water treatment center that we are working to resolve so as to begin trial production. We believe that our new state-of-the art kiwi manufacturing facility will ultimately become a significant source of revenue for the Company.
"Our project to develop orange products in Hubei Province is also intended to ensure the sourcing of supply as well as diversify our fruit product segments. We believe that the realization of our growth initiatives will stabilize the occasional volatility associated with seasonal growing challenges and enable us to realize economies of scale that will expand our margins and increase our profitability.
"Although we suffered in the past quarter due to unfavorable weather materials that constrained the supply of raw materials for manufacturing, we are optimistic that better growing seasons ahead will spur a turnaround in our fruit processing business. We are also optimistic about the potential of our kiwi development project, in particular, and are enthusiastic at seeing it come to fruition," CEO Yongke Xue concluded.
Third Quarter 2015 Financial Results
Revenue for the three months ended September 30, 2015 was $10.6 million, a decrease of 70% as compared to $34.8 million for the same period of 2014. This decrease was due to a decrease in sales from all of the Company's product segments.
Third Quarter 2015 Revenue by Product Segment (in thousands)
(In $000's, except %'s) Three Months ended
September 30,
-------------
2015 2014 % of change
---- ----
Concentrated apple juice and apple aroma - 5,617 -
Concentrated kiwifruit juice and kiwi puree 4 357 -
Concentrated pear juice 2,519 10,506 (76%)
Fruit juice beverages 8,025 14,476 (45%)
Fresh fruits and vegetables - 3,862 -
Other - 10 -
--- --- ---
Total 10,548 34,828 (70%)
====== ====== ====
Revenue by Segment. Sales from apple related products were nil for the three months ended September 30, 2015, as compared to $5.6 million for the same period of 2014. During the current period, the Company did not sell apple-related products due to the relatively low gross profit margin of apple-related products. Historically, apple-related products had the lowest gross profit margin among all of our product lines.
Sales from concentrated kiwifruit juice and kiwifruit puree were $4,000 for the three months ended September 30, 2015, as compared to sales of $357,000 for the same period of 2014. During the three months ended September 30, 2015, the Company sold a very limited amount of kiwi-related products mainly due to an unexpectedly low amount of raw material supplies.
Sales of concentrated pear juice were $2.5 million for the three months ended September 30, 2015, a 45% decrease from sales of $10.5 million for the same period of 2014. For the third quarter of 2015, the Company sold approximately 2,649 tons of concentrated pear juice, a 65% decrease from the 7,644 tons of concentrated pear juice sold in the same period of 2014. The decrease of revenue generated from concentrated pear juice was mainly due to the decreased amount of concentrated pear juice sold.
Sales from our fruit juice beverages segment were $8.0 million for the three months ended September 30, 2015, a 45% decrease from sales of $14.5 million for the same period of 2014. The decline in revenues during the current period is attributable to consumers' having increased their purchases through on-line home deliveries from the Company's competitors and a decrease in in-store retail purchases of the Company's products.
Revenue from our fresh fruits and vegetables in China were nil for the three months ended September 30, 2015 as compared to $3.9 million for the same period of 2014.
Revenue from other products were nil the three months ended September 30, 2015 as compared to $0.01 million for the same period of 2014. The amount of sales of other products is expected to be unstable and is generally not indicative of our future sales of other products.
Gross Profit. Gross profit was $3.9 million for the three months ended September 30, 2015, a 62% decrease from gross profit of $10.2 million for the same period of 2014 primarily due to the decreased amount of gross profit from all of our product lines. The consolidated gross profit margin for the current quarter was 37% as compared to 29% for the same period of 2014. This higher gross margin was attributable to a larger proportion of sales generated from the concentrated pear juice and fruit juice beverages segments.
Third Quarter 2015 Gross Profit by Product Segment (in thousands)
(In $000's, except %'s) 2015 2014
---- ----
Gross profit Gross margin Gross profit Gross margin
------------ ------------ ------------ ------------
Concentrated apple juice and apple aroma - - 103 (2%)
Concentrated kiwifruit juice and kiwi puree (1) (25%) (23) (6%)
Concentrated pear juice 851 34% 2,605 25%
Fruit juice beverages 3,055 38% 6,346 44%
Fresh fruits and vegetables - - 1,121 29%
Other - - (1) (10%)
--- ---
Total 3,905 37% 10,151 29%
===== === ====== ===
Operating expenses for the third quarter of 2015 decreased by 17% to $2.5 million, or 23% of sales, compared to $3.0 million, or 9% of sales for the same period of 2014. General and administrative expenses for the third quarter of 2015 increased 11% to $1.5 million for the third quarter of 2015 from $1.3 million for the same period of 2014. The increase in general and administrative expenses was mainly due to higher salary expenses resulting from an increase in the headcount of our management staff. Selling expenses decreased 40% to $1.0 million for the third quarter of 2015 from $1.6 million for the same period of 2014 mainly due to the reduced amount of sales generated during the current period.
Income from operations for the third quarter of 2015 was $1.5 million, a decrease of 80% from $7.2 million for the same period of 2014.
Net loss attributable to SkyPeople Fruit Juice for the third quarter of 2015 was $0.4 million as compared to net income attributable to SkyPeople Fruit Juice of $4.6 million for the same period of 2014, while loss per share was $0.02 in the current quarter as compared to earnings per share of $0.17 for the same period of 2014.
Financial Condition
As of September 30, 2015, the Company had $63.2 million in cash, cash equivalents and restricted cash, an increase of $31.5 million from $31.7 million as of fiscal year end 2014. The Company's restricted cash of $3.1 million consists of cash equivalents used as collateral to secure short-term notes payable. The Company's working capital was $34.8 million as of the end of third quarter of 2015 as compared to working capital of $34.9 million as of fiscal year end 2014. As of September 30, 2015, the Company had total debt of $60.7 million, which included $35.5 million in short-term bank loans, $8.0 million in long-term loans from a related party and $17.2 million in total capital lease obligations. Stockholders' equity attributable to SkyPeople Fruit Juice was $182.0 million as of the end of the third quarter of 2015 as compared to $186.1 million as of fiscal year end 2014.
For the first nine months of 2015, the Company's operating activities generated net cash of $38.2 million as compared net cash generated of $13.0 million from operating activities for the same period of 2014. Net cash used in investing activities were $4.8 million for the nine months of 2015 as compared to net cash used in investing activities of $37.1 million for the same period of 2014. Cash flow provided by financing activities totaled $3.6 million for the first nine months of 2015 as compared to $8.3 million of net cash used in financing activities for the same period of 2014.
We believe that projected cash flows from operations, anticipated cash receipts, cash on hand, and trade credit will provide the necessary capital to meet the Company's projected operating cash requirements for at least the next twelve months, which does not take into account any potential expenditures related to the potential expansion of our current production capacity.
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. The Company has made partial payment to acquire the land use right from the local government, purchase equipment and build facilities. As of the date of this report, the Company has finished building an office building, a dormitory, a refrigeration storage facility and a warehouse.
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. 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 of the date of this report, the Company is still working with the local government with respect to completion of the waste water treatment center; trial production at the facility will commence once this occurs.
Conference Call
The Company will hold a conference call on Tuesday, November 17, 2015 at 9:00 a.m. Eastern Time to discuss its financial results for the third quarter ended September 30, 2015.
The Company's CEO, Mr. Yongke Xue, and its 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: Tuesday, November 17, 2015
Time: 9:00 a.m. 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 passcode for the replay is 13624747 and it will be available on November 17, 2015 at 12:00 pm through November 24, 2015.
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, 2014 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, Chief Financial Officer
SkyPeople Fruit Juice, Inc.
Tel: China + 86 - 29-8837-7161
Email: oliver.x.ma@skypeoplefruitjuice.com
Web: http://www.skypeoplefruitjuice.com
SKYPEOPLE FRUIT JUICE, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
September 30, 2015 December 31,
2014
------------------ -------------
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $60,082,653 $25,130,302
Restricted cash 3,144,011 6,537,016
Accounts receivable, net of allowance of $32,678 and $837,200 as of 17,381,778 66,570,314
September 30, 2015 and December 31, 2014, respectively
Other receivables 73,052 371,995
Inventories 4,458,356 4,118,630
Deferred tax assets 1,823,418 1,410,690
Advances to suppliers and other current assets 7,462,187 472,578
--------- -------
TOTAL CURRENT ASSETS 94,425,455 104,611,525
---------- -----------
Property, plant and equipment, net 98,462,921 96,279,068
Land use right, net 6,142,756 6,502,420
Long term assets 3,041,831 3,162,281
Deposits 59,718,407 68,878,798
---------- ----------
TOTAL ASSETS $261,791,370 $279,434,092
============ ============
LIABILITIES
CURRENT LIABILITIES
Accounts payable $8,511,610 $18,381,263
Accrued expenses 10,070,942 10,085,152
Income tax payable 29,488 1,457,258
Advances from customers 499,626 469,007
Notes payable -bank - 8,171,270
Short-term loan - related party - -
Short-term bank loans 35,524,185 28,243,373
Obligations under capital leases 4,988,418 2,954,401
--------- ---------
TOTAL CURRENT LIABILITIES 59,624,269 69,761,724
---------- ----------
NON-CURRENT LIABILITIES
Long-term loan - related party 7,960,699 7,959,143
Obligations under capital leases 12,224,412 15,625,435
Long-term payable -
---
TOTAL NON-CURRENT LIABILITIES 20,185,111 23,584,578
---------- ----------
TOTAL LIABILITIES 79,809,380 93,346,302
========== ==========
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 September 30, 2015 and
December 31, 2014, respectively;
Common stock, $0.001 par value; 66,666,666 shares authorized; 26,661 26,661
26,661,499 shares issued and outstanding as of September 30, 2015 and
December 31, 2014, respectively;
Additional paid-in capital 59,189,860 59,189,860
Retained earnings 105,996,887 102,833,747
Accumulated other comprehensive income 11,934,954 19,351,703
---------- ----------
Total SkyPeople Fruit Juice, Inc. stockholders' equity 177,148,362 181,401,971
Non-controlling interests 4,833,628 4,685,819
--------- ---------
TOTAL EQUITY 181,981,990 186,087,790
----------- -----------
TOTAL LIABILITIES AND EQUITY $261,791,370 $279,434,092
============ ============
The notes in the Company's 10-Q are an integral part of these consolidated financial statements.
SKYPEOPLE FRUIT JUICE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
------------- -------------
2015 2014 2015 2014
---- ---- ---- ----
Revenue $10,548,336 $34,827,203 $39,284,644 $58,589,022
Cost of goods sold 6,643,381 24,676,265 23,109,598 40,212,499
--------- ---------- ---------- ----------
Gross profit 3,904,955 10,150,938 16,175,046 18,376,523
Operating Expenses
General and administrative expenses 1,462,677 1,317,546 4,720,805 3,506,497
Selling expenses 984,512 1,628,415 3,308,393 3,877,904
------- --------- --------- ---------
Total operating expenses 2,447,189 2,945,961 8,029,198 7,384,401
Income from operations 1,457,766 7,204,977 8,145,848 10,992,122
Other income (expense)
Interest income 47,377 75,809 311,403 387,682
Subsidy income - 91,362 238,187 562,333
Interest expenses (1,714,906) (811,317) (3,412,066) (3,373,521)
Consulting fee related to capital
lease (339) (20,952) (339) (903,652)
---- ------- ---- --------
Total other expenses (1,667,868) (665,098) (2,862,815) (3,327,158)
Income (loss) before income tax (210,102) 6,539,879 5,283,033 7,664,964
Income tax provision 159,661 1,822,995 1,792,401 2,154,205
------- --------- --------- ---------
Net income (loss) (369,763) 4,716,884 3,490,632 5,510,759
Less: Net income attributable to non-
controlling interests (55,955) (153,475) (327,492) (394,810)
------- -------- -------- --------
NET INCOME (LOSS) ATTRIBUTABLE TO
SKYPEOPLE FRUIT JUICE, INC. (425,718) $4,563,409 3,163,140 5,115,949
======== ========== ========= =========
Other comprehensive income (loss)
Foreign currency translation
adjustment (8,172,082) 8,747 (7,596,432) (1,708,333)
---------- ----- ---------- ----------
Comprehensive income (loss) (8,541,845) 4,725,631 (4,105,800) 3,802,426
Comprehensive (income) expense
attributable to non-controlling
interests 128,475 (104,259) (147,809) (240,197)
------- -------- -------- --------
COMPREHENSIVE INCOME (LOSS)
ATTRIBUTABLE TO SKYPEOPLE FRUIT
JUICE, INC. $(8,413,370) $4,621,372 $(4,253,609) $3,562,229
=========== ========== =========== ==========
Earnings (loss) per share:
Basic and diluted earnings (loss) per
share $(0.02) $0.17 $0.12 $0.19
====== ===== ===== =====
Weighted average number of shares
outstanding
Basic and diluted 26,661,499 26,661,499 26,661,499 26,661,499
The notes in the Company's 10-Q are an integral part of these consolidated financial statements.
SKYPEOPLE FRUIT JUICE, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
-------------
2015 2014
---- ----
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $3,490,632 $5,510,759
Adjustments to reconcile net income to
net cash provided by operating
activities
Depreciation and amortization 4,701,533 3,031,314
Deferred income tax assets (412,728) (410,086)
Bad debt provision (804,524)
Inventory markdown -
Changes in operating assets and
liabilities
Accounts receivable 48,865,852 (12,813,534)
Other receivable 293,422 (627,449)
Advances to suppliers and other current
assets (7,220,094) 668,853
Inventories (511,685) 730,838
Accounts payable (7,876,850) 12,080,673
Accrued expenses (951,496) 5,305,632
Income tax payable (1,413,939) (608,156)
Advances from customers 49,956 60,930
------ ------
Net cash provided by operating
activities 38,210,079 12,929,774
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Refund of purchase deposit - 7,498,389
Additions to property, plant and
equipment (4,622,320) (16,430,606)
Prepayment for other assets - (28,184,348)
Prepayments for deposit on equipment (142,774)
--------
Net cash used in investing activities (4,765,094) (37,116,565)
---------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Dividend paid to non-controlling
interest - (4,410,222)
Decrease (Increased) in restricted cash 3,239,496 (11,635,476)
(Repayment) Proceeds from short-term
notes (8,098,740) 12,123,678
Proceeds from short-term bank loans (15,028,524) 20,302,162
Repayment of short-term bank loans 23,831,727 (20,673,500)
Payment for security deposit of capital
lease (3,148,902)
Payment for capital lease (344) (797,443)
Repayment of related party loans (374,913) (24,970)
-------- -------
Net cash (used in) provided by
financing activities 3,568,702 (8,264,673)
--------- ----------
Effect of change in exchange rate (2,061,336) (558,140)
NET DECREASE IN CASH AND CASH
EQUIVALENTS 34,952,351 (33,009,604)
Cash and cash equivalents, beginning of
period 25,130,302 66,888,954
---------- ----------
Cash and cash equivalents, end of
period $60,082,653 $33,879,350
=========== ===========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION
Cash paid for interest $3,412,066 $2,553,422
Cash paid for income taxes $1,636,409 $3,172,447
SUPPLEMENTARY DISCLOSURE OF SIGNIFICANT
NON-CASH TRANSACTION
Transferred from other assets to
property, plant and equipment and $6,878,117 $1,324,438
construction in process
Equipment acquired by capital lease $ - $20,992,677
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SOURCE SkyPeople Fruit Juice, Inc.
