NANFENG, China, May 21, 2014 /PRNewswire-FirstCall/ -- China Fruits Corporation (OTC: CHFR) ("China Fruits" or "the Company"), a distributor and producer of fresh tangerine and other fresh fruits in the People's Republic of China, today announces financial results for the first quarter of 2014.
First Quarter 2014 Highlights
"The company's business development is line with our strategic plans. The fast growth rate of revenues is attributed to our efforts in developing overseas market and to increase of franchise stores," said Mr. Quanlong Chen, Chairman and Chief Executive Officer of China Fruits Corporation, "and we launched "Taina® Miss Fruit" Beauty Contest on March 5th, 2014. We hope selected fruit beauties can deliver healthy lifestyles to customers and to increase our brand's recognition."
First Quarter 2014 Results
- Revenues
China Fruits reported total revenue of $8,015,860 for the first quarter of 2014, representing an increase of 984% from the corresponding period in 2013, primarily driven by the Company's efforts in developing overseas markets and in increasing franchises stores.
Revenues from overseas sales were approximately $5,102,085, of which $4,432,187 was from Thailand, $127,302 was from Dubai and $63,025 was from Indonesia. The Company had 10 franchise retail stores in the Beijing area as of March 31, 2014, compared to 4 stores in the same period in 2013.
- Cost of Goods Sold
Cost of revenue was $7,098,744 for the first quarter of 2014, an increase of 1037% from $624,075 for the corresponding period in 2013.
Gross margin was 11.44% for the first quarter of 2014, compared to 15.58% for the corresponding period in 2013. The gross margin of fresh fruits products typically ranges between 10% and 15%. The reduction of gross margin was primarily due to promotion activities of low price and price increase from some suppliers. The Company expected to reduce the cost of goods sold through collaboration with more non-related suppliers, which would also help us to reduce the risk of concentration.
- Operating Expenses
Operating expenses were $924,179 for the first quarter of 2014, an increase of 127% from $406,331 for the corresponding period in 2013.
Selling expenses were $596,470 for the first quarter of 2014, an increase of 269% from $161,647 for the corresponding period in 2013.
General and administrative expenses were $327,710 for the first quarter of 2014, an increase of 34% from $244,684 for the corresponding period in 2013.
- Operating Loss
Operating loss was $7,064 for the first quarter of 2014, narrowing 98% from the corresponding period in 2013.
- Net Income and EPS
Net income attributable to China Fruits shareholders was $ 114,711 for the first quarter of 2014, compared to a net loss of $261,746 in the same period in 2013. Fully diluted earnings per share were $0.0023, compared to negative earnings per share in the same period in 2013. The net income during first quarter of 2014 was also due to the grants received from the local government in amount of $239,132, which was to encourage the Company's efforts on modern agricultural development. Without the government grant, the Company would have suffered loss of $36,741.
- Cash
As of March 31, 2014, China Fruits had cash and cash equivalents of $1,586,253, compared to $40,217 as of December 31, 2013. Cash flows used in operating activities were $2,382,555 for the first quarter of 2014. Cash flows used in investing activities were $10,225. Net cash provided by financing activities was $3,950,552.
Financial Guidance
The Company expects sales to increase during 2014 as the Company is moving toward implementing its business plan, including the increase in franchise retail stores, development of overseas market, and e-commence business expansion.
The Company also expects the total number of franchise stores to be increased to around 64 by the end of 2014. The expansion will be accomplished via acquisitions, franchises sales and/or direct setups.
In April 2014, the Company launched "Taina® Miss Fruit" Beauty Contest, and selected 10 fruit beauties. The Company expects selected fruit beauties to increase China Fruits' brand awareness and to lead new trend of healthy lifestyles.
About China Fruits Corporation
China Fruits Corporation (OTC: CHFR) is a U.S.-listed holding company, engaging in manufacturing, trading and distributing fresh tangerine and other fresh fruits in the People's Republic of China. The Company wholly owns two subsidiaries: Taina International Fruits (Beijing) Co., Ltd., which is building and operating franchise retail stores, and Jiangxi Taina Nanfeng Orange Co., Ltd., which is operating a 782,765-square-foot manufacturing base in Jiangxi Province's Nanfeng County. The Company owns a 98,505-square-foot Express Export Zone in Nanfeng, with air-adjusted and fresh-keeping warehouse, and advanced photoelectric fruit sorter. In Beijing, the Company possesses a 26,700-square-foot distribution center and six franchise retail stores across the city. With the support from the international capital markets, the company is strengthening the branded franchise fruit retail stores and digging deeply in this niche. From the very beginning of its business, the Company has been awarded with "National Leading Enterprise of Agriculture Industrialization", "China's Most Influential Fruit Brand", "Leading Fruit Enterprise", and "Top Ten Most Trustable Enterprise" among other rewards. For more information, please visit the Company's corporate website: www.taina.cn.
Forward Looking Statement
This press release contains "forward-looking information", which may include, but is not limited to, statements with respect to the future financial or operating performance of the Company and its projects. Often, but not always, forward-looking statements can be identified by the use of words such as "plans", "expects", "is expected", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates", or believes" or variations (including negative variations) of such words and phrases, or state that certain actions, events or results "may", "could", "would", "might" or "will" be taken, occur or be achieved. Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of China Fruits Corporation to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Forward-looking statements contained herein are made as of the date of this press release and China Fruits Corporation disclaim, other than as required by law, any obligation to update any forward-looking statements whether as a result of new information, results, future events, circumstances, or if management's estimates or opinions should change, or otherwise. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, the reader is cautioned not to place undue reliance on forward-looking statements
For More Information
Investor Relations
Dragon Gate Investment Partners
Email: taina@dgipl.com
Tel: +1 (646) 801-2803
Website: http://www.dgipl.com
China Fruits Corporation
| |||||||||||||
ASSETS | 3/31/2014 | 12/31/2013 | |||||||||||
Current Assets
| |||||||||||||
Cash & Cash Equivalents | $ 1,586,253 | $ 40,217 | |||||||||||
Accounts Receivable, Net | 4,960,027 | 4,075,765 | |||||||||||
Other Receivable, Net | 261,301 | 141,363 | |||||||||||
Advance to Supplies | 1,886,946 | 2,162,844 | |||||||||||
Inventories | 531,289 | 1,566,556 | |||||||||||
Prepaid Expense | 61,484 | 67,862 | |||||||||||
Refundable Tax | 102,886 | 266,719 | |||||||||||
TOTAL CURRENT ASSETS | 9,390,186 | 8,321,326 | |||||||||||
Noncurrent Assets | |||||||||||||
Property, Plant & Equipment, Net | 3,290,772 | 3,370,148 | |||||||||||
Construction in Progress | 1,136 | 1,146 | |||||||||||
Intangible Assets, Net | 322,574 | 331,697 | |||||||||||
Other Long-term Asset Deposit | 24,343 | 24,548 | |||||||||||
Organization Cost/ L/T Amortization | 3,609 | 4,479 | |||||||||||
TOTAL NON-CURRENT ASSETS | 3,642,434 | 3,732,018 | |||||||||||
TOTAL ASSETS | 13,032,620 | 12,053,344 | |||||||||||
CURRENT LIABILITIES | |||||||||||||
Accounts payable and Accrued Expenses | 1,549,813 | 4,238,843 | |||||||||||
Notes Payable - Current Portion | 2,710,203 | 2,479,379 | |||||||||||
Customer Deposit | 389,698 | 493,164 | |||||||||||
Taxes Payable | 425,963 | 261,286 | |||||||||||
Other Payables | 91,464 | 657,952 | |||||||||||
Due to Related Parties | 4,773,037 | 1,074,031 | |||||||||||
Accrued liabilities and Payroll Tax Liabilities | 514,724 | 354,489 | |||||||||||
TOTAL CURRENT LIABILITIES | 10,454,902 | 9,559,144 | |||||||||||
LONG-TERM LIABILITIES | |||||||||||||
Note Payable-Longterm | - | - | |||||||||||
TOTAL LONG TERM LIABILITIES | - | - | |||||||||||
TOTAL LIABILITIES | 10,454,902 | 9,559,144 | |||||||||||
STOCKHOLDERS' EQUITY | |||||||||||||
Common stock, par value $.001, 100,000,000 shares authorized, 49,951,223 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively
| 49,951 | 49,951 | |||||||||||
Preferred stock, 200,000,000 shares authorized, designated as Series A and Series B.
Series A: par value $.001; 2,000,000 shares authorized, 13,150 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively
| 13 | 13 | |||||||||||
Series B; par value $0.001, voting; 50,000,000 shares authorized, 12,100,000 shares issued and outstanding as of March 31, 2014 and December 31, 2013, respectively
| 12,100 | 12,100 | |||||||||||
Additional Paid in Capital | 3,789,864 | 3,789,864 | |||||||||||
Statutory Reserve | 170,950 | 170,950 | |||||||||||
Retained Earnings | (1,888,385) | (2,003,096) | |||||||||||
Accumulated Other Comprehensive Income | 443,225 | 474,419 | |||||||||||
TOTAL STOCKHOLDERS' EQUITY | 2,577,718 | 2,494,201 | |||||||||||
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | 13,032,620 | 12,053,344 | |||||||||||
China Fruits Corporation
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Three Months Ended | |||||||
REVENUES: | 3/31/2014 | 3/31/2013 | |||||
Sales | $ 8,015,860 | $ 739,222 | |||||
Cost of Goods Sold | 7,098,744 | 624,075 | |||||
GROSS PROFIT | 917,115 | 115,147 | |||||
OPERATING EXPENSES: | |||||||
Selling Expenses | 596,470 | 161,647 | |||||
General and Administrative | 327,710 | 244,684 | |||||
TOTAL OPERATING EXPENSES | 924,179 | 406,331 | |||||
Operating Income/(Loss) | (7,064) | (291,184) | |||||
OTHER INCOME (EXPENSE): | |||||||
Other Income | 14,308 | 5,826 | |||||
Other Expense | - | - | |||||
Interest Income | 60 | - | |||||
Interest Expense | (51,109) | (31,826) | |||||
Government Grants | 239,132 | 55,438 | |||||
TOTAL OTHER INCOME (LOSS) & EXPENSE | 202,391 | 29,438 | |||||
INCOME (LOSS) FROM CONTINUING OPERATIONS BEFORE INCOME TAXES | 195,326 | (261,746) | |||||
Income Tax Expense | 80,615 | - | |||||
NET Income (Loss) | 114,711 | (261,746) | |||||
Other compressive income | |||||||
-Foreign currency translation gain (Loss) | (31,194) | 6,249 | |||||
COMPREHENSIVE (LOSS) | 83,517 | (255,497) | |||||
(Loss) per common share: | |||||||
Basic and fully diluted | ** | (0.01) | |||||
Weighted Average Number of Common Shares Outstanding - Basic and Fully Diluted | |||||||
49,951,223 | 49,951,223 | ||||||
** Less than $0.01 | |||||||
China Fruits Corporation
| |||||
Three Months Ended | |||||
Cash Flows from Operating Activities | 3/31/2014 | 3/31/2013 | |||
Net Income/(loss) | $ 114,711 | $ (261,746) | |||
Adjustments to reconcile net loss to net | |||||
Cash provided by (used in) operating activities: | - | ||||
Depreciation and Amortization | 59,425 | 66,718 | |||
(Increase) decrease in operating assets: | - | ||||
Accounts receivable | (884,262) | 321,286 | |||
Inventories | 1,035,267 | (42,371) | |||
Prepaid expenses and other current assets | 326,376 | 79,878 | |||
Increase (decrease) in operating activities: | - | ||||
Accounts payable | (2,689,030) | 26,723 | |||
Other payables and accrued liabilities | (509,719) | 21,119 | |||
Tax payable | 164,677 | 69 | |||
Deferred income | - | - | |||
Net cash (used in) provided by Operating Activities | (2,382,555) | 211,676 | |||
Cash Flows from Investing Activities | |||||
Purchase of property and equipment | (10,225) | (20,249) | |||
Purchase of intangible assets | |||||
Proceed from disposal of property and equipment | |||||
Net cash provided (Used in) by Investing Activities | (10,225) | (20,249) | |||
Cash Flows from Financing Activities | |||||
Advance from (to) a third party | 3,699,006 | (40,172) | |||
Proceeds from /(Payments on) Notes Payable | 251,546 | (152,655) | |||
Payments on Notes Payable | |||||
Proceeds from Note Payable -related party | |||||
Due to stockholders | 57,664 | ||||
Net cash provided by (used in) Financing Activities | 3,950,552 | (135,163) | |||
Foreign currency translation adjustment | (11,736) | 181 | |||
Net increase/(decrease) in cash & cash equivalents for the periods | 1,546,036 | 56,445 | |||
Cash & cash equivalents: | |||||
Beginning of period | 40,217 | 47,399 | |||
End of period | 1,586,253 | 103,844 | |||
Supplementary disclosures of cash flows information: | |||||
Cash paid for interest | 41,091 | 31,334 | |||
Cash paid for income taxes | 164 | - | |||
